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COMMERCIAL TENANCIES - Landlord's remedies - Recovery of rent - Damages - Summary proceedings

Tuesday, August 01, 2017 @ 8:33 AM  

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Appeal by the defendant tenant, Haztech Fire and Safety Services, from partial summary judgment granted in favour of the plaintiff landlord, M. Thompson Holdings. The parties signed a 10.5-year commercial lease. The defendant took possession in June 2013. The defendant acknowledged that it breached the lease in September 2013 due to non-payment of rent. The plaintiff formally terminated the lease in October 2013. A portion of the premises was re-let for a ten-year term in December 2015. The plaintiff sought summary judgment for past and future damages totaling $1.4 million or alternatively, sought damages to November 2015 in the amount of $612,850 with leave to return the matter for assessment of damages thereafter. The defendant submitted the plaintiff failed to adequately mitigate its loss due to refusal of certain purchase offers, and refusal to re-let a portion of the premises to another business. The chambers judge found no triable issue regarding mitigation. The plaintiff was awarded damages of approximately $500,000 in respect of the pre-breach period and the post-breach period until November 2015, plus prejudgment interest. The chambers judge found that quantification of future damages was a triable issue, and granted the plaintiff leave to return to assess future damages in one-year intervals from the date of judgment. The defendant appealed.

HELD: Appeal allowed. The chambers judge did not err in determining the plaintiff sufficiently mitigated its damages, as there was no evidence that the refusal to re-let or sell the premises was unreasonable. However, the chambers judge committed an error in principle in granting leave to the plaintiff to come back to court to assess future damages. Although it was reasonable to refuse summary judgment on the issue of future damages given the insufficiency of the parties' evidence, the onus was on the plaintiff to prove all of its damages as of the date of adjudication. Future damages were to be assessed at the present value of the unpaid future rent for the unexpired period of the lease, less the actual rental value of the premises for that period. The matter of future damages was referred for trial.

M. Thompson Holdings Ltd. v. Haztech Fire and Safety Services Inc., [2017] S.J. No. 316, Saskatchewan Court of Appeal, R.G. Richards C.J.S., M.J. Herauf and P.A. Whitmore JJ.A., July 18, 2017. TLD-July312017003