Background:

• Lease Details: A commercial lease agreement, effective from September 15, 2017, for private school operations.
• Timeline:
  • March 2020: Fredericton Montessori Academy Inc. (Tenant) inquired about breaking the lease, citing growth and relocation needs.
  • July 2020: The tenant abandoned the leased premises.
  • January 2022: 711 Woodstock Holdings Inc. (Landlord) began using the premises for storage, deducting three months of rent.
  • September 14, 2022: Lease expired.

Key Issues:

1. Liability for Unpaid Rent:

   • FMA claimed Woodstock Holdings’ re-entry implied lease surrender. The court disagreed, noting compliance with lease provisions allowed reentry without terminating the lease.
   • FMA was found liable for unpaid rent until lease expiry, subject to any credit for the landlord’s occupancy beyond March 2022.

2. Mitigation of Damages:

   • The court affirmed the landlord had no duty to mitigate under the lease and relevant case law.

3. Claimed Costs:

   • Remedial Costs: Evidence for repair costs was insufficient; further trial was ordered to assess their necessity.
   • Administration Fee: Entitlement at 15% of remedial costs, pending trial.
   • Interest: Specific prime rate plus 5% was undetermined, requiring trial clarification.

4. Solicitor-Client Costs:

   • Explicitly provided for in the lease and upheld by the court, pending taxation officer assessment.

Decision:

• Summary Judgment: Granted in favor of the landlord for liability.
• Damages Trial Ordered: To address:
  • Possible rent credit if the landlord occupied the premises beyond March 2022.
  • Legitimacy and calculation of remedial costs and administration fees.
  • Determination of applicable interest rate.