When the government ordered the closure of all non-essential
businesses, tenants quickly turned to their leases to see if the
pandemic would qualify as force majeure and discharge them from
their rent obligations. Hengyun International Investment
Commerce Inc. v. 9368-7614 Québec Inc., 2020 QCCS 2251,
("Hengyun") was one of the first Canadian cases
to consider force majeure in the context of COVID-19
government-mandated shutdowns. It sparked hope for tenants that
rent relief was possible.
In Hengyun, the Landlord and the original Tenant, VFC,
entered into a five-year lease to operate a gym. VFC soon made an
assignment in bankruptcy and 9368-7614 Québec Inc.
("Québec Inc.") began operating on the premises.
At issue was whether Québec Inc. had a right to occupy the
premises and a right to reduced rent as a result of problems in the
premises and the COVID-19 pandemic.
