Mitigation After Termination, Not Before

The Ontario Superior Court of Justice recently confirmed some well-settled law: if a landlord chooses to keep the lease alive despite the tenant's default, it need not make efforts to mitigate its losses.

In Daniels CCW Corporation v. Shevchuk, the tenant and indemnifier argued that the landlord's mitigation duty arose before the landlord provided the tenant with a notice of termination. However, the Court gave no support to this argument.

The Facts

Beginning in October of 2020, the Tenant continuously failed to pay rent. Nine months after the initial default, in July of 2021, the landlord issued a notice of default. The landlord did so again in November of 2021. In December of 2021, the indemnifier advised the landlord that the tenant's business would not survive the impact of the COVID-19 pandemic, and that the landlord should simply terminate the lease. The landlord decided not to terminate the lease at that time. In February of 2022, the landlord