2017 Harvest

2017 Harvest

Monday, September 20, 2010

Court dismisses tenant farmer's $1.2 million claim over 108 ac. property

Timothy Ehler began renting a 108-acre farm property in Waterdown in 1992 from Salem Christian Mental Health Association Inc.  At the end of August of this year, the Ontario Superior Court of Justice dismissed Elher's claim for:
(a) a declaratory order that he “has the right to remain on the property (a 108 acre farm located at 562 Dundas Street East in Waterdown (the “Salem property”)) until he turns 65 years of age.”
(b) a complementary injunction “prohibiting the defendant from taking any steps to regain possession of the property until the plaintiff turns 65 years of age”; and
(c) in the alternative, damages in the amount of $1,200,000.00.
Elher's position was that in 1992 the defendant’s representative, Reverend Dreise, assured Elher that he would be allowed to remain in possession of the subject property until he turned 65 years of age.  Over the next seven years, the parties entered into two other leases, each for a period of two years and each with two two year renewal clauses.  The last lease was signed in January 1999.  The parties also entered into two additional work agreements, the last of which was also signed in January 1999.  Notably, the last two leases included a provision whereby a sale of the property would trigger early termination of the lease.

In 2004, the Defendant advised Elher that it would need the property within a year and provided notice of termination as of December 31, 2005.  Up to the time of trial, Elher had possession of the subject farm for about 18 years and, since about 1996 or 1997, the house had been a most comfortable, perhaps even elegant, residence for which he paid minimal rental of $700 per month.  Elher volunteered the opinion that the parking rights for his trucking business alone on the Salem property had a market value of about $1,000 per month and the rental value of the property since 1996 is at least $3,000 per month, although admittedly the plaintiff himself created much of the value in the house.  The highest value placed by the Elher's experts on the costs of improving the property incurred by Elher, after having received reimbursements of $400 a month pursuant to the work agreements, was $218,651.80.

The Court found that there was no agreement that Elher could remain in possession until the age of 65:
There is no credible evidence of any oral agreement allowing the plaintiff to remain in possession of the property until he turned 65 years of age.  Apart from the lack of evidence, such an agreement would have been, from the point of view of the defendant, the height of irrationality.  The defendant intended ultimately to develop the land, although there was some uncertainty about the date for beginning the development.  There was no reason for Reverend Dreise to misrepresent that the zoning could not be changed until 2023, and I find as a fact that he did not do so. 
The Court also found that the Defendant had not been unjustly enriched by Elher's work on the property (which was compensated through various work agreements).
Read the decision at: Ehler v. Salem Christian Mental Health.