On March 14, 2025, the Court of King’s Bench released its judgment in CNOOC Petroleum North America ULC v 801 Seventh Inc. After discovering small concentrations of an asbestos-containing material from construction in the 1980s, CNOOC terminated its lease of the entire Nexen Tower, a major high rise office building in downtown Calgary, with twelve years remaining on its lease. CNOOC relocated its staff to another building and left all 37-floors of the Nexen Tower empty. The landlord, a syndicate of a major pension fund and five prominent Calgary families, sued.
The case was divided into liability and damages segments, and a sixty-day liability trial ensued. The Court found that the tenant’s breach was unlawful and unjustified, and that its purported safety concerns, if validly held at all, were a substantial overreaction to a non-existent threat. The Court found that the building was completely safe, and would remain so.
The case, which has been closely watched by commercial landlords in Alberta and the rest of Canada, will now move to the damages phase. Damages are estimated to be in the hundreds of millions of dollars of lost rent.
The trial judge's comprehensive decision, encompassing more than 1000 paragraphs, provides important and rare judicial guidance on a number of subjects, including the interpretation and operation of the Occupational Health and Safety Act and the duties of parties to carry out their contractual obligations in good faith.
The Bennett Jones team, which includes commercial litigators Blair Yorke-Slader KC, Michael Mysak, David McKinnon, Ciara Mackey, David Wahl, Tyler McDonough, Alicia Yowart and Heather Taskey, represents the landlord.
Read the full decision here.
Bennett Jones