Windmill Place v. Apeco of Canada Ltd., (1978) 19 N.R. 124 (SCC)

• Judge: Laskin, C.J.C., Ritchie, Spence, Dickson and Estey, JJ.
• Court: Supreme Court (Canada)
• Case Date: February 07, 1978
• Jurisdiction: Canada (Federal)
• Citations: (1978), 19 N.R. 124 (SCC);1978 CanLII 186 (SCC);82 DLR (3d) 1;[1978] 2 SCR 385;3 RPR 137;19 NR 124

Windmill Place v. Apeco of Can. Ltd. (1978), 19 N.R. 124 (SCC)

MLB headnote and full text

Windmill Place v. Apeco of Canada Ltd.

Indexed As: Windmill Place v. Apeco of Canada Ltd.

Supreme Court of Canada

Laskin, C.J.C., Ritchie, Spence, Dickson and Estey, JJ.

February 7, 1978.

Summary:

This case arose out of a claim for damages by a landlord for breach of a business lease. On October 1, 1975 the landlord rented to the defendant tenant 2,526 square feet in a new warehouse building at Halifax, Nova Scotia. The warehouse contained 62,500 square feet of rentable space. Shortly after agreeing to a 5 year lease the tenant decided not to honour the lease. By March 1976 the landlord had rented 20,700 square feet in the new warehouse. The landlord was able to rent the space which he had agreed to rent to the defendant tenant. The trial court awarded the landlord damages of $18,908, including $14,500 for the cost of improvements made by the landlord for the tenant. The judgment of the trial court is reported at 16 N.S.R.(2d) 566 at paragraphs 39 to 77.

On appeal by the landlord to the Nova Scotia Court of Appeal the appeal was allowed and the judgment of the trial court was set aside. The Nova Scotia Court of Appeal stated that the cost of improvements made by the landlord for the tenant was not recoverable by the landlord because the landlord's rental charges included a charge for the leasehold improvements. However, the Nova Scotia Court of Appeal held that the rental by the landlord of 20,700 square feet subsequent to October 1, 1975 did not constitute mitigation. The Nova Scotia Court of Appeal stated that in a multiple-tenant building which is largely vacant and is likely to remain vacant, the landlord does not recoup or mitigate his loss by renting a small portion of the building to another tenant. The Nova Scotia Court of Appeal awarded the landlord damages of $37,500, being the present value of $13,224 per year for 5 years less a deduction for probable partial mitigation during the 5 year period. The judgment of the Nova Scotia Court of Appeal is reported at 16 N.S.R.(2d) 566.

On appeal by the tenant to the Supreme Court of Canada the appeal was dismissed and the judgment of the Nova Scotia Court of Appeal was affirmed.

Damages - Topic 1044

Mitigation - In contract cases - Exception, where the plaintiff's recovery in a subsequent transaction is unrelated to the defendant's breach - The Supreme Court of Canada referred to the duty of a plaintiff to recover any part of his loss in a subsequent transaction - The Supreme Court of Canada referred to the qualification that the subsequent transaction must arise out of the defendant's breach - See paragraph 8.

Damages - Topic 6232

Lease of land - Breach by lessee - Mitigation of damages by the landlord - What constitutes mitigation - On October 1, 1975 a landlord rented to the defendant tenant 2,526 square feet of a new warehouse building at Halifax, Nova Scotia - The warehouse contained 62,500 square feet of rentable space - The tenant shortly after agreeing to a 5 year lease decided not to honour the lease - By March, 1976, the landlord had rented 20,700 square feet in the warehouse building including the space originally rented to the defendant tenant - In March 1976 the market for warehouse space in the Halifax area was depressed - The Supreme Court of Canada affirmed a judgment of the Nova Scotia Court of Appeal which held the tenant liable for damages for breach of the lease - The Nova Scotia Court of Appeal awarded the landlord damages of $37,500, being the present value of lost rent at $13,224 a year for 5 years less a reduction for probable partial mitigation during the 5 year period - The Nova Scotia Court of Appeal stated that in a multipletenant building which is largely vacant and is likely to remain so, the landlord does not recoup or mitigate his loss by renting a small unit to another tenant.

Cases Noticed:

British Westinghouse Electric and Manufacturing Co. v. Underground Electric Railways, [1912] A.C. 673, folld. [para. 8].

Karas v. Rowlett, [1944] S.C.R. 1, folld. [para. 8].

Counsel:

John M. Roland, for the appellant tenant;

Stewart McInnes, for the respondent landlord.

This appeal was heard by LASKIN, C.J.C., RITCHIE, SPENCE, DICKSON and ESTEY, JJ. at Ottawa, Ontario on November 30, 1977.

The judgment of the Supreme Court of Canada was delivered by RITCHIE, J. at Ottawa, Ontario on February 7, 1978.