Highway Properties Ltd. v. Kelly, Douglas and Co. Ltd.

Highway Properties Ltd. v. Kelly, Douglas and Co. Ltd.

Where a tenant repudiates a commercial lease the landlord, upon electing to terminate or to repossess, does not thereby forfeit the right to recover present damages representing prospective loss over the unexpired term; repossession does not automatically operate as a surrender that extinguishes contractual remedies for future loss, and the Goldhar rule to the contrary is overruled; the remedy depends on the election and proof of damages and the matter is remitted for assessment.

Citation
[1971] SCR 562
Parties
Appellant (plaintiff): Highway Properties Limited; Respondent (defendant): Kelly, Douglas and Company Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
1 February 1971
Procedural Posture
Appeal (landlord and Tenant) / Final Appeal to the Supreme Court of Canada on Appeal From the Court of Appeal for British Columbia
Outcome
Appeal allowed; Goldhar v. Universal Sections and Mouldings Ltd. overruled; matter remitted for assessment of damages; costs to appellant
Legal Topics
Repudiation, Surrender by Operation of Law, Measure of Damages, Anticipatory Breach, Reletting on Tenant's Account, Mitigation
Source Language
English
Landlord and Tenant Contract Property Law Repudiation Surrender by Operation of Law Measure of Damages Anticipatory Breach Reletting on Tenant's Account +1 more

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Parties

Highway Properties Limited

Appellant (plaintiff)

Kelly, Douglas and Company Limited

Respondent (defendant)

Procedural Posture

Appeal (landlord and Tenant) / Final Appeal to the Supreme Court of Canada on Appeal From the Court of Appeal for British Columbia

Legal Issues

  1. 1 Whether repossession by landlord following tenant repudiation operates as an automatic surrender barring recovery of prospective damages over the unexpired term
  2. 2 Whether a landlord who elects to terminate the lease can nonetheless recover present damages for future loss resulting from the tenant's repudiation
  3. 3 Whether the Goldhar decision correctly precluded recovery of prospective damages where landlord resumed possession

Ratio Decidendi

Where a tenant repudiates a commercial lease the landlord, upon electing to terminate or to repossess, does not thereby forfeit the right to recover present damages representing prospective loss over the unexpired term; repossession does not automatically operate as a surrender that extinguishes contractual remedies for future loss, and the Goldhar rule to the contrary is overruled; the remedy depends on the election and proof of damages and the matter is remitted for assessment.

Court Disposition

Appeal allowed; Goldhar v. Universal Sections and Mouldings Ltd. overruled; matter remitted for assessment of damages; costs to appellant

Orders

  • Appeal allowed
  • Goldhar v. Universal Sections and Mouldings Ltd. overruled