As a general rule, a person who has suffered harm can have the person responsible for causing the harm ordered to pay damages by proving fault, harm, and a causal link between the fault and the harm. That rule is tempered however by various other legal rules, and can be further nuanced by the clauses in a contract, particularly in the area of commercial leases.
The parties to a commercial lease have a great deal of contractual freedom, and they can derogate from the general rules laid down in the Civil Code of Québec (the “Civil Code” or the “CCQ”) regarding the liability of the lessee. The intention of the parties evident in the lease will then take precedence over the codified rules. Where the lease is silent, the suppletive law (i.e. the Civil Code) applies.
In lease and hire matters, the courts have tended to broadly construe the contractual relationship. In one case, for example, a man slipped and fell on ice while walking towards the stable where he had rented a stall for his horse. The Court of Appeal found that the relationship between the parties was governed by the contractual regime, and since there was no specific provision in the lease concerning such situations, applied the provisions of the Civil Code regarding the lessor’s obligation to provide peaceful enjoyment of the leased premises.1
With respect to damages caused to the leased premises, article 1862 of the Civil Code provides as follows:
The lessee is bound to make reparation for injury suffered by the lessor by reason of any loss sustained by the leased property, unless he proves that the loss is not due to his fault or that of persons he allows to use or to have access to the property.
Where the leased property is an immovable, the lessee is not bound for injury resulting from a fire unless it is proved that the fire was due to his fault or that of persons he allowed to have access to the immovable.
This article, and particularly the second paragraph, has led to a good deal of questions and debates. The state of the law has been clarified somewhat thanks to various leading decisions, but some reflexes persist and other issues will continue to arise over time.
Non-applicability of the presumption of the autonomous act of a thing
It is often the case that the cause or even the origin of a fire is indeterminate. In such cases, the effect of the second paragraph of article 1862 is that the lessor cannot have the lessee found liable for the damage caused.
In an attempt to circumvent this difficulty, lessors sometimes invoke the presumption under article 1465 of the Civil Code:
The custodian of a thing is bound to make reparation for injury resulting from the autonomous act of the thing, unless he proves that he is not at fault.
However, a party cannot arbitrarily transfer out of the contractual regime to the extra-contractual regime in order to benefit from the latter’s more flexible rules.2 And because the presumption under article 1465 is part of the extra-contractual regime, it cannot be set up against the lessee by the lessor.3
While technically the state of the law is fixed in this regard, it is still frequently the case that a party to a lawsuit pursuant to a lease will invoke the presumption under article 1465 CCQ in its pleadings. Sometimes, surprisingly, this argument succeeds.4
The Court of Appeal recently ruled once again on this issue.5 In that case, the lessee had leased a commercial space for the operation of a hair salon. The lessor had made a dryer available for the use of the lessee. During the term of the lease, the building was destroyed by a fire caused by the malfunctioning of the dryer and an accumulation of lint blocking the exhaust vent. The lessor invoked article 1465 CCQ, alleging that the lessee had custody of both the dryer and the exhaust vent.
The Court of Appeal pointed out that the obligations of the parties to a commercial lease are governed primarily by the lease and that the Civil Code, apart from its provisions that are of public order, applies in only a suppletive manner. In the case before it, the lease contained no specific provision relevant to the dispute. The Court reiterated that the lessor cannot rely on the presumption under article 1465 CCQ, as it applies exclusively in extra-contractual matters. As for keeping the exhaust vent unblocked, there was no specific provision in the lease in that regard, and the Court was of the view that this was not one of the minor maintenance obligations of the lessee under the Civil Code. The lessor was unable to prove that the lessee had committed a fault, for example by failing to clean the dryer’s lint filter or by operating a dryer that had indicia of an imminent malfunction.6
It should be pointed out that the situation will be the same whether the damages are caused solely to the leased premises or to the rest of the building as well.7
Fire caused by a person to whom the lessee has allowed access to the premises
The lessor of course has an extra-contractual right of action against such a person who causes a fire, but it also has a contractual right of action against the lessee for the faults committed by that person.
Pursuant to the second paragraph of article 1862 of the Civil Code, the lessee is liable for any fault committed by its invitee, but only for the damage caused to the leased premises. If it is established that the invitee was at fault, the lessee automatically becomes liable towards the lessor for the damage to the leased premises, without the lessor having to prove that the lessee committed a fault.
With respect to the concept of an invitee to whom the lessee has allowed access to the leased premises, in a 2013 case where the fire was caused by the minor child of the lessee, the child was characterized by the Court as an invitee8. In finding the lessee liable for the fault of her child, the judge based himself on the presumption of liability that applies to a person having parental authority (article 1459 CCQ). That approach is in our view questionable, as the presumption under article 1459, like that under article 1465 CCQ, is intended to apply only in extra-contractual matters. The lessor in that case should have been required to prove that the mother was at fault in the way she supervised the child.
Regarding the mechanics of an award of damages where only the invitee was at fault, the court will issue a joint and several (in solidum) order against the lessee and the invitee for the damage caused to the leased premises, and an order against the invitee alone for the damage caused to the rest of the building.
Of course, if the lessee also committed a fault, the lessor is entitled to be compensated for all of its damages by the lessee. In such a situation, the order to pay damages will be made on a joint and several basis.
To summarize, the lessor under a commercial lease has the burden of proving, without relying on any of the presumptions that apply in extra-contractual matters, that the lessee was at fault. However, the lease must be carefully analyzed, as the parties may have derogated from article 1862 CCQ, and sometimes only for certain types of damage. The parties may even have gone so far as to exclude the possibility of the lessor suing the lessee.