BC Supreme Court restrains City of Kelowna from terminating lease in the midst of real-estate-development dispute
January 2, 2026
BY Kevin Zakreski
350 Doyle Avenue Holdings Inc. v City of Kelowna, 2025 BCSC 2532, concerned an application “for an interlocutory or, alternatively, interim injunction preventing the defendant, the City of Kelowna . . ., from terminating a 99-year lease for property located in downtown Kelowna”. The case involved three conjoined actions over a large-scale real-estate development and the decision to grant an injunction largely turned on the plaintiff’s ability to demonstrate irreparable harm if its request for a pre-trial injunction were refused.
The underlying action concerned a mixed-use tower, which the plaintiff proposed to build in downtown Kelowna. After granting the plaintiff a development permit, the City of Kelowna changed course and rescinded its permit. In short order, the “underlying action was commenced in February of 2024, and is grounded in breach of contract; that is, a breach of the 99-year lease, and misfeasance in public office”.
In deciding this application for an injunction, the court started with the well-known three-element test:
The test for an interim or an interlocutory injunction is well known and not in dispute. As the Supreme court outlined in RJR MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] S.C.J. No. 17, three principal considerations are at play which are to be treated as factors and not a checklist (see Cambie Surgeries Corp. v. British Columbia (Attorney General), 2019 BCCA 29 at para. 19):
a. there is a serious question to be determined;
b. the applicants will suffer irreparable harm if the injunction is refused; and
c. the balance of convenience favours the granting of injunctive relief.
On the first element, it was conceded that the plaintiff had a serious question to be determined.
The main focus of the court’s reasons for judgment was on the second element. On this point, the court accepted the plaintiff’s arguments that this case represented a unique development opportunity, which if lost couldn’t be made up for with damages:
[23] While I do not believe the time and money spent on the project constitute irreparable harm in and of themselves, like in Winking Judge, they are evidence of the importance of this particular project to the plaintiffs, which they describe as their “flagship” project.
[24] The City says Winking Judge can be distinguished on the basis that there was a unique existing liquor licence at the heart of that case. I agree the liquor licence was of particular importance to the defendant in Winking Judge, but that does not detract from the fact that the project in this case is a unique opportunity that is of considerable importance to the plaintiffs.
The court also found that the balance of convenience favoured the plaintiff:
While I appreciate the City’s position that it is entitled to exercise its contractual rights under the lease in light of the plaintiffs’ conduct (including that there was a finite time in which to commence construction on the project), and that no delay should be laid at their feet, it is fair to conclude in this case that it is the City that is looking to alter the status quo by terminating the lease.
In the result, the court concluded that it was “satisfied that an interlocutory injunction should be issued enjoining termination of the lease until such time as the two judicial review proceedings have been heard and determined”.
