Panther Sports Medicine and Rehabilitation Centres Inc v Adrian G Anderton Professional Corporation, 2019 ABQB 973

Court of Queen’s Bench of Alberta Citation: Panther Sports Medicine and Rehabilitation Centres Inc v Adrian G Anderton Professional Corporation, 2019 ABQB 973 Date: 20191218 Docket: 1801 12079 Registry: Calgary Between: Panther Sports Medicine and Rehabilitation Centres Inc. Plaintiff/Applicant - and - Adrian G. Anderton Professional Corporation Defendant/Respondent _______________________________________________________ Reasons for Decision of the Honourable Madam Justice A. Woolley _______________________________________________________ Introduction [ 1 ] In the Fall of 2013, the Defendant Adrian G.

Anderton Professional Corporation (“Anderton”) agreed to sub-lease 1295 square feet of professional office space from the Plaintiff Panther Sports Medicine and Rehabilitation Centres Inc. (“Panther”). Anderton vacated the premises in February 2018. [ 2 ] On August 24, 2018 Panther sued Anderton seeking to recover rent it says Anderton owed under the sub-lease from May 2018, when Anderton stopped paying rent. [ 3 ] On June 26, 2019 Panther applied for

summary judgment seeking payment of rent through to April 2019, when Panther terminated its head-lease with First Capital Corporation Holdings Ltd. [ 4 ] The basis for Panther’s claim is straightforward: Anderton attempted to repudiate the lease by moving out; Panther exercised its legal right to refuse repudiation and treat the lease as ongoing; Panther can thus sue in debt for amounts not paid under the lease. [ 5 ] In short, Panther says that it has elected to take the first course of action described by Justice Laskin (as he then was) in Highway Properties Ltd v Kelly, Douglas & Co [1971] 2 SCR 562 at para 14 : a landlord “may do nothing to alter the relationship of

landlord and tenant, but simply insist on performance of the terms and sue for rent or damages on the footing that the lease remains in force”. In these circumstances, Panther submits, where it has proved the lease and rent owed, and there was no duty to mitigate, this Court ought to grant

summary judgment in its favour. [ 6 ] For its part, Anderton disputes the claim that Panther owed no duty of mitigation. On July 16, 2019 it applied for an order requiring Panther to provide disclosure and particulars with respect to Panther’s efforts to mitigate its losses arising from Anderton’s vacation of the premises. [ 7 ] On August 6, 2019 Master Farrington denied Panther’s application for

summary judgment: Panther Sports Medicine & Rehabilitation Centres Inc v Adrian G. Anderton Professional Corporation , 2019 ABQB 599 . He granted Anderton’s application for further and better disclosure on the question of Panther’s efforts to mitigate its loss. [ 8 ] Panther appeals Master Farrington’s decision. [ 9 ] For the reasons that follow, I deny Panther’s appeal.

In my view this case raises a genuine issue for trial with respect to the nature and extent of a commercial landlord’s duty to mitigate its losses, whether Panther had such a duty in this case, and whether it failed to mitigate such that it ought not to recover all of the amounts it claims from Anderton. [ 10 ] I agree with Panther’s submission that Canadian courts have traditionally accepted the premise that landlords who refuse a tenant’s repudiation have no duty to mitigate.

However, that case law almost entirely predates Supreme Court jurisprudence in relation to the duty to mitigate for contracts relating to land, particularly its decision in Southcott Estates Inc. v Toronto Catholic District School Board , 2012 SCC 51 at para 31-40 .

Southcott and the specific performance cases that precede it create a change of circumstances that “fundamentally shifts the parameters of the debate” and merits this Court’s reconsideration of the issue: Carter v Canada (Attorney General) 2015 SCC 5 at para 44 , citing Canada (Attorney General) v Bedford 2013 SCC 72 at para 42 . [ 11 ] For the purposes of this

summary judgment application I do not need to decide whether landlords ought to have a duty to mitigate in general, or whether Panther in particular had such a duty; my only obligation is to consider whether there is a genuine issue to be tried on those questions.

I observe, however, that the law established by Southcott , as well as Justice Laskin’s central point in Highway Properties that a lease must be assessed in light of the law of contract, suggest that landlords should not be given an unqualified right to elect specific performance by refusing repudiation, and thereby avoid the ordinary contractual obligation to mitigate their losses. Issue [ 12 ] This appeal raises a single issue: was Master Farrington correct in dismissing Panther’s claim for

summary judgment, and requiring Panther to provide disclosure with respect to its efforts to mitigate its losses? Background Facts [ 13 ] In the fall of 2018 Dr. Anderton, the principal of Anderton, entered into discussions with Mr. Lloyd Weber, the President of Panther, with respect to working in premises together at Cranston Market Square. They explored the issue of developing a multi- disciplinary practice in the space, and the possibility of Dr. Anderton expanding his clinic operations. There were some challenges in doing so, however, because Dr.

Jan Jaffer, a dentist, had a medical exclusivity clause for the entire business plaza at Cranston Market Square. Ultimately, however, the parties obtained a relaxation of the medical exclusivity clause from Dr. Jaffer. [ 14 ] As a result, Anderton and Panther entered into an “Offer to Sub-Lease and Interim Agreement” dated November 5, 2013 (“Offer”). They both executed the Offer. In Clause 1 the Offer described the area to be sub-leased by the tenant. In Clause 2 it set the term for the sub-lease of five years and ten months, beginning on February 1, 2014 and ending on November 30, 2019.

Clause 3 set out the base rent of $37.00 per square foot per annum, Clause 4 required Anderton to contribute to the operating costs, which for 2013 were estimated at $12.35 per square foot, and Clause 5 required Anderton to pay for GST on the rent and operating costs. [ 15 ] Clause 9 of the Offer required Panther to prepare and forward a formal sub-lease agreement and made Anderton’s possession conditional on execution of the sub-lease. The sub-lease was, however, never provided by Panther. [ 16 ] Clauses 14 and 15 imposed conditions precedent on Panther and Anderton and required that those conditions be waived.

The failure to waive was said to “render this Offer to Sub-Lease and Interim Agreement Null and Void”. No waiver was provided by either Panther or Anderton. [ 17 ] In the fall of 2017 Anderton raised with Panther the possibility that it might leave the premises. Dr. Anderton attests that he met with Mr. Weber on October 17, 2017. He says that he told Mr. Weber that his business was unsustainable, and that he had an opportunity to move to a new location with lower rent per square foot. He describes the meeting as amicable and says that Mr. Weber told him that moving made good business sense. [ 18 ] Dr.

Anderton provided an e-mail from Mr. Weber dated December 12, 2017 where Mr. Weber asked for a key to the medical side to preview it. Mr. Weber said: “Need to look at space. To see what I can do to expand my space without too much Reno’s. In lite of your office moving come the new year. Trying to look at all possibilities. I can’t put medical in there due to Jan Jaffer’s conditions”. [ 19 ] On about February 23, 2018 Anderton vacated the premises it had been sub-leasing. Dr. Anderton did not provide any specific notice to Panther of his intention to vacate the premises. In an e-mail sent to Mr.

Weber dated February 23, 2018 Dr. Anderton said “As

for the future of the space, I’m very aware of my lease commitments, and will continue to pay rent until you find someone else to occupythe space, or until the lease has expired”. [20] In March 2018 Dr. Anderton had several e-mail exchanges with Pat Pepe, the Office Manager of Panther with respect to thepayment of rent. In an e-mail dated March 21, 2018, Mr. Pepe noted that Mr. Weber was “looking for a new tenant”. [21] On July 11, 2018 Mr. Pepe sent Dr. Anderton an e-mail noting that several months of rent were outstanding and needed to bepaid, and Mr. Weber sent a formal demand letter to Dr. Anderton as well.

The letter said: At this time, we still do not have a resolution for rent owed in the month of February which was due on the first of the month nor havewe gotten a response to the numerous attempts to email you … We have also not received payment on rent for the month of June…Your account is now 30+ days past due and you owe a total of$6,182.50. As of writing this letter we have not received the rent for the month of July…You have an amount of $6,182.50 owing.

I regret to inform you that unless we receive payment in full by [deleted] or work out an agreed upon payment plan by this date, we willhave to turn your invoice over to a collection agency and/or attorney. [22] By way of an e-mail to Panther dated July 16, 2018 Dr. Anderton described his financial difficulties and his inability to payrent at this time. He said, “I think the best situation is for another company to take over the premises in Cranston Market Square as soonas possible – is there no-one interested?” [23] On August 24, 2018 Panther filed its Statement of Claim.

It pled that Anderton had breached the lease by failing to pay rentand moving out of the premises. It claimed that Anderton owed it money, said that it rejected Anderton’s repudiation of the lease, andrequired Anderton to perform all its obligations under the lease. It said it would only take possession of the premises for the purpose ofre-letting them for Anderton’s account, but that to date no new tenant had been found. It sought judgment for the rent owed to that pointand that would be owing at the point of judgment, as well as interest. [24] On September 27, 2018 Anderton filed its Statement of Defence.

It claimed that by virtue of the failure to waive theconditions the Offer was null and void. It said that the failure to provide a sub-lease meant that this was not a lease but was rather aTenancy-at-Will. It claimed that the discussions in the fall of 2017 meant that Panther knew and accepted Anderton’s plan to terminate,and consequently had a duty to mitigate. [25] On April 30, 2019 Panther surrendered its head lease. [26] On June 26, 2019 Panther filed an application for

summary judgment. It claims there is no genuine issue to be tried, and seeksto recover rent for the period from May 2018 to April 2019 inclusive, in the amount of $84,729.38. [27] The parties exchanged Notices to Admit Facts on each other at that time, both of which were put into the Record before me. Inits Reply Panther stated that it “investigated several potential arrangements to re-lease the balance of the Defendant’s space”.

It listedseven parties to whom it had spoken about this possibility. [28] On July 16, 2019 Anderton filed an application seeking further and better production with respect to its efforts at mitigation. [29] In his August 6, 2019 decision rejecting Panther’s application, Master Farrington reviewed the test for

summary judgment setout in Hyrniak v Mauldin 2014 SCC 7 , [2014] 1 SCR 87 as explained and refined by the Court of Appeal in Weir-JonesTechnical Services Incorporated v Purolator Courier Ltd. 2019 ABCA 49. [30] Master Farrington emphasized that granting

summary judgment requires that the presiding justice be “satisfied that the recordallows him or her to have confidence in their conclusions, and be satisfied that the matter can be determined fairly in a

summary setting”(Panther at para 4). In Master Farrington’s view, that was not possible here. [31] Master Farrington noted that Anderton pled a duty to mitigate, while Panther claimed that mitigation was irrelevant. Hereferenced Panther’s reliance on a 1991 decision by Master Funduk in Multi-Developers Ltd v Allied Distributors Ltd. 1991 CarswellAlta 51. In that decision Master Funduk held that a landlord had no duty to mitigate.

Master Farrington distinguished Multi-Developers,however, because in that case the lease had an acceleration clause, and the landlord sued only for two months rent, both of which mademitigation irrelevant. [32] Master Farrington emphasized that failure to mitigate is an ordinary course argument in a landlord-tenant dispute, whichAnderton was “entitled to properly make” and, consequently, to make “a reasonable level of inquiry into the facts.” In thosecircumstances, Panther could not refuse to provide disclosure on the issue: Panther at para 8. [33] With respect to “evidence before the Court to the effect that it was contemplated by both parties that the sub-landlord wouldmake attempts to re-sublet the premises”, Master Farrington held that the “present record is not sufficient to allow me to consider theprinciples in Highway Properties”. [34] Panther filed its notice of appeal on August 23, 2019.

Analysis [35] This Court must review decisions by a Master on the basis of correctness; the appeal is considered a hearing de novo:

Bahcheli v Yorkton Securities Inc. 2012 ABCA 166 at para 30; Van Camp v Chrome Horse Motorcycle Inc. 2012 ABQB 175 at para29-31. [36] In my view Master Farrington’s decision to dismiss the appeal for

summary judgment and grant the application for betterdisclosure was correct; as will become clear, however, my reasons for reaching that result differ somewhat from his. [37] I do, though, begin at the same place as Master Farrington, which is with the Alberta Court of Appeal’s decision in Weir-Jones. In that case the Court of Appeal affirmed that

summary judgment ought to be granted where there is “no genuine issue requiring atrial”, as set out by the Supreme Court in Hyrniak at para 49: There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion forsummary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows thejudge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. [38] The Court of Appeal explained that the first two parts of this test go to the ability of a judge to make appropriate findings offact on a

summary basis, and to apply the law to those facts. It said that the third part goes to whether a

summary process will causeprocedural or substantive injustice to either party: Weir-Jones at para 21. It emphasized that a plaintiff seeking

summary judgment mustprove the “factual elements of its case on a balance of probabilities and that there is no genuine issue requiring a trial… it must prove ‘nodefence’”. The party resisting

summary judgment must only show that “the record, the facts, or the law preclude a fair disposition”:Weir-Jones at para 32. [39] The Court of Appeal specifically held that in some cases, while the facts may be capable of being established, uncertainties ordifficulties in the law will properly preclude

summary judgment: While the law does not have to be beyond doubt before

summary judgment can be granted, there are occasions when the law is sounsettled or complex that it is not possible to apply the law to the facts without the benefit of a full trial record: e.g. Tottrup vClearwater at para. 11; Cardinal v Alberta Motor Association Insurance Co., 2018 ABCA 69 at para. 10, 66 Alta LR (6th)15; Condominium Corp. No. 0321365 v Cuthbert, 2016 ABCA 46 at para. 29, 33 Alta LR (6th) 209, 612 AR 284; AxcessMortgage Fund Ltd. v 1177620 Alberta Ltd., 2018 ABQB 626 at para. 49… (Weir-Jones at para 45). [40] The Court concluded by summarizing the correct approach to considering an application for

summary judgment:

a) Having regard to the state of the record and the issues, is it possible to fairly resolve the dispute on a

summary basis, or douncertainties in the facts, the record or the law reveal a genuine issue requiring a trial?

b) Has the moving party met the burden on it to show that there is either “no merit” or “no defence” and that there is no genuine issuerequiring a trial? At a threshold level the facts of the case must be proven on a balance of probabilities or the application will fail, butmere establishment of the facts to that standard is not a proxy for

summary adjudication.

c) If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record that there is agenuine issue requiring a trial. This can occur by challenging the moving party’s case, by identifying a positive defence, by showing thata fair and just

summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring a trial. If there isa genuine issue requiring a trial,

summary disposition is not available.

d) In any event, the presiding judge must be left with sufficient confidence in the state of the record such that he or she is prepared toexercise the judicial discretion to summarily resolve the dispute: Weir-Jones at para 47; emphasis in original. [41] In my view Panther’s application fails on the first branch of this test. Specifically, uncertainties in both the law and the factspreclude an award of

summary judgment. [42] As set out in its brief and explained to me, Panther’s claim for

summary judgment is straightforward: (

a) Anderton and Panther had a valid sub-lease. (

b) Anderton abandoned the premises. (

c) Panther rejected Anderton’s repudiation of the sub-lease and demanded payment of rent. (

d) Anderton did not pay. (

e) Panther had the right to do refuse repudiation and demand payment pursuant to Highway Properties at para 14: “He may donothing to alter the relationship of landlord and tenant, but simply insist on performance of the terms and sue for rent or damages on thefooting that the lease remains in force”. (

f) Having taken this approach, Panther had no duty to mitigate and could sue for past rent owed as a matter of debt collection. (

g) Therefore, Panther is entitled to

summary judgment. [43] Panther has considerable case law to support its claim that a landlord can refuse repudiation and assert the demands of itslease without any duty to mitigate its losses. [44] In 2011, Justice Veit said, “Although it is conceded that there is a generalized duty to mitigate, the law relating specifically tolandlords and tenants imposes no such obligation”: Manufacturers Life Insurance Company v Executive Centre at Manulife PlaceInc., 2011 ABQB 189 at para 21.

[45] A similar position was taken by Justice MacCallum in BG Preeco 3 Ltd. v Universal Explorations Ltd., (ABQB) at para 57. And in 1991, Master Funduk said, in relation to an argument that the plaintiff landlord had a duty to mitigate, that: The defence that the Plaintiff did not ‘mitigate its damages’ is not sensible. It is not responsive to the claim, which is a debt claim. It isnot the law that a creditor has a duty to ‘mitigate his debt’. There is no such principle of law.

There is no such thing as ‘mitigating adebt’: Multi-Developers Ltd v Allied Distributors Ltd. 1991 Carswell Alta 51 at para 29. [46] In 1996 the Ontario Court of Appeal similarly concluded that, In these circumstances, the decision of the Supreme Court of Canada in Highway Properties … confirms that the landlord has no duty tomitigate. Although the question of a duty on the landlord to mitigate has been the subject of comment, Highway Properties has not beenoverruled on this point”: Almad Investments Ltd. v Mister Leonard Holdings Ltd, (ONCA). [47] In a 1990 decision in Grouse Mechanical Co.

Ltd v Griffith et al, (1990) 14 RPR (2d) 233 at 240 (BCSC) Justice Cowantook a contrary position, saying, “Once the tenant breached his obligations or stated his intention to breach his obligations, the plaintiffhad a duty to mitigate his loss, unless the plaintiff had ‘substantial and legitimate interest’ in actual performance”.

However, that decisionwas cast in doubt by a subsequent 1993 decision of the British Columbia Court of Appeal in Transco Mills Ltd. v Percan EnterprisesLtd., (BC CA) at para 38, where the Court held “There is in my view no basis on which a landlord of commercialpremises can be required to mitigate its loss where it maintains the lease in existence and claims for rent due.” The Court of Appeal heldthat a change in the law at this point must be made by the legislature, not the courts. [48] In 3709303 Manitoba Ltd v Maxer Limited 2008 MBQB 219, Chief Justice Monnin of the Manitoba Court of Queen’s Benchprovided a thorough analysis of this issue.

He pointed out that the significance of Highway Properties was because it “veered from thetraditional property analysis … whereby commercial leases were treated only as an estate in real property”: 3709303 at para 27. ChiefJustice Monnin observed that this aspect of Justice Laskin’s decision has “led many authors to suggest that the duty to mitigate incommercial lease situations flows from the reasoning in Highway Properties and cases that have followed it”: 3709303 at para 31.

Afterreviewing the case law, however, Chief Justice Monnin concluded “I am of the view that while the case law is not clear, the prevailingview is that if the landlord/tenant relationship survives, namely that the lease has not been terminated whether in fact or by operation oflaw, there is no duty to mitigate.

However, if mitigation does occur it will be taken into account in the assessment of damages”: 3709303at para 35. [49] The most recent decision on this point comes from the Supreme Court of Nova Scotia, where Justice Gabriel observed thatthis issue arises relatively infrequently, “for the obvious reason that a tenant who has defaulted on its rent is generally impecunious and,in such cases, it will often make little practical sense to take this route”: Innotech Aviation v Skylink Express Inc. 2018 NSSC 93 atpara 12.

Nonetheless, Justice Gabriel confirmed that in such cases the landlord has in effect a right to specific performance and no duty tomitigate its losses: “On the authority of Highway Properties, and despite the relative paucity of circumstances in which specificperformance is available to an aggrieved party to a contract, both parties acknowledged that such a remedy is available to the ApplicantIMP in this case.

As I said earlier, I agree”: Innotech at para 17. [50] All of this supports Panther’s conclusion that in law it could refuse to accept Anderton’s repudiation and assert its right to therent, with no duty of mitigation.

The difficulty, however, is that all of these cases, except Innotech, precede the decision of the SupremeCourt in Southcott, and in Innotech the Court did not appear to have Southcott brought to its attention. [51] In my view the decision in Southcott, and the Supreme Court decisions on specific performance that precede it, fundamentallychange the legal framework for assessing the remedies available where a party has breached a contract related to land.

These casesreveal, albeit in a somewhat different context, the natural development of the central point made in Highway Properties, that whereparties have an agreement in relation to land, that agreement must be legally understood not only as a matter of the realty which is itssubject, but also as a matter of the contract through which the relationship is created and defined. [52] To understand this point it is worth returning to the decision in Highway Properties.

In that case Justice Laskin held that alandlord who accepts repudiation and relets premises should also be entitled to sue for damages arising subsequent to the point ofsurrender. He overturned a prior decision by the Ontario Court of Appeal which had held that where a landlord accepts repudiation thatresults in “obliteration of all the terms in the document of lease” and precludes the lease from being used “to support a claim thereon forprospective loss”: Highway Properties at para 17 explaining Goldhar v Universal Sections and Mouldings Ltd. (ONCA), [1963] 1 OR 189 (CA).

In Justice Laskin’s view, Goldhar resulted from treating a lease purely as an “estate in land” withoutrecognizing its contractual form and context: Highway Properties at para 11; 27. He questioned the “persistent ascendancy of a conceptthat antedated the development of the law of contracts in English law and has been transformed in its social and economic aspects byurban living conditions and by commercial practice”: Highway Properties at para 12.

Ultimately, Justice Laskin concluded on thisbroader point that: It is no longer sensible to pretend that a commercial lease, such as the one before this Court, is simply a conveyance and not also acontract.

It is equally untenable to persist in denying resort to the full armoury of remedies ordinarily available to redress repudiation ofcovenants, merely because the covenants may be associated with an estate in land: Highway Properties at para 27. [53] In the course of explaining this point Justice Laskin briefly reviewed existing law with respect to the rights of landlords: The developed case law has recognized three mutually exclusive courses that a landlord may take where a tenant is in fundamentalbreach of the lease or has repudiated it entirely, as was the case here.

He may do nothing to alter the relationship of landlord and tenant,but simply insist on performance of the terms and sue for rent or damages on the footing that the lease remains in force. Second, he mayelect to terminate the lease, retaining of course the right to sue for rent accrued due, or for damages to the date of termination forprevious breaches of covenant.

Third, he may advise the tenant that he proposes to re-let the property on the tenant’s account and enterinto possession on that basis: Highway Properties at para 14. [54] Justice Laskin went on to observe, however, that “there is no need to discuss either the first or second of the alternatives

mentioned above”; his

summary of the case law was entirely obiter, and was also descriptive of the state of the law rather than aconsidered endorsement of that law. His real point – that a landlord who accepts repudiation may nonetheless sue for damages based onthe parties’ agreement – flowed from his observations at para 27, which is that contracts for land cannot be understood apart from thecontext and norms of contract law. [55] Justice Laskin’s observations in this respect were, as we have seen, not taken up by lower courts in relation to whetherlandlords ought to have a duty to mitigate where they refuse repudiation.

They were, however, substantively advanced by the SupremeCourt in its decisions regarding remedies for contracts for the sale of land, where the Court moved away from viewing specificperformance as a universally available remedy for breach of such contracts. [56] In Semelhago v Paramadevan, (SCC), [1996] 2 SCR 415, the Supreme Court held that “It is no longerappropriate…to maintain a distinction in the approach to specific performance as between realty and personalty”: Semelhago at para 21.The issue, rather, is whether the “property is unique to the extent that its substitute would not be readily available”: Semelhago at para22.

It is only if the property is unique that specific performance ought to be ordered. [57] In Southcott the Court developed this point further, holding that merely because a contract relates to land, a party cannot seekspecific performance and thus “reasonably refuse to mitigate”: Southcott at para 40. A party can only refuse to mitigate if it has “somefair, real and substantial justification” for a claim for specific performance, or “a substantial and legitimate interest” in seeking specificperformance: Southcott at para 36.

Otherwise, just as in any claim for breach of contract, the non-breaching party’s claim for damageswill be assessed in light of its efforts to mitigate its losses. [58] This line of authority suggests that the dominant assumption by lower courts, that a landlord can elect to refuse repudiationand bring an action in debt for unpaid rent, must be reconsidered. As observed in Innotech, those lower court decisions effectively givea landlord an unqualified right to elect specific performance in the face of a tenant’s breach of a commercial lease.

That right isinconsistent with Southcott and the specific performance cases that precede it.

Those cases make it clear that the take-away fromHighway Properties must not be Justice Laskin’s obiter description of options given to a landlord under case law prior to 1971, but ratherhis central observation that contracts for land must be understood through their contractual context, including the non-breaching party’sduty to mitigate. [59] In my view this Supreme Court jurisprudence merits a trial court’s reconsideration of this legal question consistent with thestandard set out in Carter: The doctrine that lower courts must follow the decisions of higher courts is fundamental to our legal system.

It provides certainty whilepermitting the orderly development of the law in incremental steps. However, stare decisis is not a straitjacket that condemns the law tostasis.

Trial courts may reconsider settled rulings of higher courts in two situations: (1) where a new legal issue is raised; and (2) wherethere is a change in the circumstances or evidence that “fundamentally shifts the parameters of the debate” (Canada (Attorney General)v Bedford, 2013 SCC 72 , [2013] 3 S.C.R. 1101, at para. 42): Carter at para 44. [60] The Supreme Court’s jurisprudence on specific performance, which emphasizes that contracts for land must be considered intheir contractual context, including with respect to the duty of mitigate, creates a fundamental shift in the parameters of the debate thatmerits reconsideration of whether a landlord can avoid the duty to mitigate. [61] I also note that critics have challenged the view that Highway Properties means landlords have no duty to mitigate where theyrefuse repudiation.

In “The Commercial Lease: Property or Contract”, (2001) 38 Alta Law Rev 989, for example, Jason Brock and JimPhillips argue: While Highway Properties effected a partial reform of the law relating to landlords' remedies in the face of tenant abandonment, itappears to have effectively done nothing in the related area of mitigation.

Over the past three decades courts have alternatively assumedthat there is such a duty; have believed that there was not such a duty but that there should be; have refused to say whether they areenunciating such a new doctrine; and have contented themselves with a conclusion that it does not matter, providing that mitigation hasactually taken place.

This uncertainty is in itself something that ought to be remedied; combined with the fact that it does seem logical togive the landlord an obligation which ordinarily in the law corresponds to their new right, one cannot but conclude that a case likeTransco Mills is wrongly decided: “The Commercial Lease” at 1003. [62] In 2009 the BC Law Reform Institute (“BCLRI”), in its “Report on Proposals for a New Commercial Tenancy Act,” observedthat “Highway Properties was silent on the issue of mitigation”.

It acknowledged that subsequent cases “have made it clear that alandlord still does not have a duty to mitigate” when it refuses repudiation; however, the BCLRI argued that mitigation ought to bepermitted as a matter of legislative reform: BCLRI Report, at p. 44. For other critical consideration of this issue see 3709303 at para 31-34. [63] This critical perspective has merit as a matter of policy. A landlord whose tenant has breached a lease is the party bestpositioned to mitigate the loss; in some cases, the landlord may be the only party who can do so.

I am troubled by the idea that the lawwould permit a landlord to sit back and allow losses to accumulate, when the landlord through reasonable steps could avoid them. This isparticularly the case given that we would not normally expect commercial rental premises to be unique or special, such that specificperformance is an appropriate remedy. In this case, for example, the premises were office space rented by the square foot; there does notseem to have been anything remarkable about them.

As such, why should Panther, or any landlord, have what is in effect a right tospecific performance of that ordinary commercial good? [64] In offering this analysis I am not deciding the issue of whether landlords have a duty to mitigate or, if they do, when such aduty arises or of what it consists. Obviously, I have indicated my perspective based on the record before me, but that record isincomplete, and the issue is not for me to decide. Rather, the issue currently before me is, should

summary judgment be granted? Basedon this analysis, I conclude that the Supreme Court’s decision in Southcott makes the legal question of whether Panther had a duty tomitigate sufficiently uncertain so as to preclude its application for

summary judgment: Weir-Jones at para 45.

[ 65 ] Even if I am wrong in this respect, however, additional uncertainties in the factual and legal record suggest that

summary judgment ought not to be granted. [ 66 ] As noted, the parties did not enter into a formal sub-lease. The Offer that they executed was not properly complied with in so far as Panther failed to “prepare and forward” the formal sub-lease and yet granted Anderton possession. The Offer was also not complied with in relation to the conditions precedent. This raises an issue about the precise nature of the agreement between the parties and, in particular, whether the Offer reflects the parties’ agreement.

That calls into question Panther’s reliance on the Offer as the basis for its exercise of the first option under Highway Properties to refuse repudiation and sue for the remainder of the rent owing. [ 67 ] Further, the agreement here was a sub-lease, not a lease. The existing case law finds no duty to mitigate the context of leases; it does not address the issue of sub-leases, although Transco did deal with an assignment.

It may be that landlords in a sub-lease can also refuse repudiation and have no duty to mitigate; however, it may also be that different considerations arise in relation to sub-leases that merit a different legal analysis. [ 68 ] In addition, while Panther in its Statement of Claim said that it refused repudiation, the record does not demonstrate to me on the balance of probabilities that they did so. I note in this respect the communications between Mr. Weber and Dr. Anderton in the fall of 2017, and also efforts Panther says that it made to find an alternative tenant.

It may be that such efforts are consistent with a refusal of repudiation; however, I am not sufficiently satisfied that that is the case so as to award Panther

summary judgment for the rent owing, even if they had no duty to mitigate. [ 69 ] In short, even if the law remains unchanged, and a landlord with a lease has the right to refuse repudiation and sue for rent owed with no duty to mitigate, the factual record does not satisfy me that this case falls within that legal duty.

The precise terms of the parties’ agreement are uncertain, the application of Highway Properties to sub-leases not established, and the record does not show on the balance of probabilities that Panther in fact refused repudiation. [ 70 ] Finally, because Panther declined to provide any records with respect to mitigation, I cannot assess whether they in fact made such efforts so as to permit

summary judgment in their favour regardless of uncertainty in the law. Based on its Reply Notice to Admit, Panther may in fact have been able to demonstrate that it made reasonable efforts to mitigate. It refused to provide disclosure on that point, however, which means that no

summary determination is possible. Conclusion [ 71 ] I thus deny Panther’s appeal and uphold Master Farrington’s order refusing Panther’s application for

summary judgment and ordering that it provide further and better disclosure with respect to its efforts to mitigate its losses. Heard on the 3 rd day of December, 2019 Dated at the City of Calgary, Alberta this 18 th day of December, 2019. A. Woolley J.C.Q.B.A. Appearances: Patrick F. Mahoney for the Plaintiff/Applicant Regan E. Dahl for the Defendant/Respondent