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ARTICLE · 04 JULY 2013

Tenant Successful In Dispute Over Lease Deposit

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The British Columbia Court of Appeal decision in "Shanahan v. Turning Point Restaurant Limited" explores the Landlord’s right to terminate a lease for non-payment of rent when the Landlord is holding the Tenant’s deposit.

CanadaReal Estate and Construction
Natasha Jimeno
Natasha Jimeno
Anne-Marie Widner
Anne-Marie Widner
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The British Columbia Court of Appeal decision in Shanahan v. Turning Point Restaurant Limited1 explores the Landlord's right to terminate a lease for non-payment of rent when the Landlord is holding the Tenant's deposit. The case also addresses the appropriate quantum of compensatory and punitive damages to be awarded on the unlawful termination of a lease agreement.

The Initial Decision

At trial, Turning Point Restaurant Ltd. (the "Landlord") was ordered to pay $92,900.00 plus costs to Michael Shanahan (the "Tenant") for terminating a lease of premises mid-term for non-payment of rent. The Tenant ran a restaurant in the rental premises that was not profitable, and as a result defaulted on its monthly rent payment. The Landlord delivered notice of default to the Tenant in accordance with the lease, and eventually terminated the lease for non-payment of rent. The central issue in this case was the characterization of a $7,600.00 deposit paid by the Tenant to the

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