Case information

Contracts — Commercial leases — Repudiation — Duty to mitigate — Stare decisis — Interpretation — Are commercial landlords exempt from the duty to mitigate damages? — If the common law is able to grow and adapt to changing conditions, when and how should lower courts depart from Supreme Court of Canada decisions on common law? — Should courts apply the plain meaning of the words chosen by the parties in interpreting a contract, in the absence of any factual matrix evidence?<br>

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The appellant, Aphria Inc. (“tenant”), entered into a ten-year lease for commercial office premises with the respondent landlords and successors (collectively, “landlord”). The tenant served a notice of repudiation on the landlord and vacated the premises. The landlord did not accept the tenant’s repudiation of the lease. Ultimately, the landlord sued the tenant for rents owing.

The motion judge in the Ontario Superior Court of Justice granted the landlord summary judgment for the rent owing plus interest. The motion judge declined to grant the landlord judgment for future rent. The motion judge dismissed the tenant’s cross-motion for summary judgment for a declaration that if rent was owing, the amount was capped at rent owing for two years from the date of default pursuant to the lease. The Ontario Court of Appeal unanimously dismissed the tenant’s appeal. It held that the motion judge did not err by refusing to depart from Highway Properties Ltd. v. Kelly, Douglas and Co. Ltd., [1971] S.C.R. 562, in order to recognize a duty to mitigate on commercial landlords who reject a repudiation of a lease by the tenant. The court also held that the motion judge did not err in his interpretation of the lease.