Canada: Rolling Liability for Continuous Breaches of Commercial Leases

Last Updated: May 24 2017
Article by Jason Annibale and Lauren Ray

Commercial leases often contain covenants of continuous performance; a breach of such a covenant is also continuous. However, a business’ decision to enter into, default under, or litigate a commercial lease is made at a distinct moment in time. Businesses can weigh the costs and benefits of such a decision most accurately when obligations and rights can be estimated contemporaneously. Identifying the scope of liability is vital to ensure that such a decision is sufficiently informed. The Ontario Court of Appeal’s decision in Pickering Square Inc. v Trillium College Inc.[1], sheds light on the limitation of liability in leases when breaches are continuous, specifically, when a claim for a continuing breach of contract will be considered ‘discovered’ for the purposes of the Limitations Act, 2002[2].


Trillium College Inc. (“Trillium”) and Pickering Square Inc. (“Pickering”) were parties to a five-year lease. The covenants of the tenant, Trillium, included the payment of rent, occupation of the premises, and operation of its business within the leased premises. In late 2007, Trillium gave notice to its landlord, Pickering, that it was vacating the premises prior to the expiry of the lease. Pickering sued Trillium for arrears of rent in early 2008 and this suit was resolved in the following months when Trillium agreed to pay the arrears in rent and occupy the premises under the terms of the lease. Trillium paid the arrears in rent but did not resume occupation. Trillium continued to pay rent for the full term of the lease until its expiry in May 2011.

In February 2012, Pickering brought a claim for damages allegedly caused by Trillium’s failure to occupy the premises and operate its business in accordance with the lease. Trillium brought a motion for summary judgment seeking a dismissal of Pickering’s claim on the grounds that the claim was outside the basic two-year limitation period imposed by the Limitations Act, 2002. As Pickering was aware that Trillium had ceased its occupation of the premises almost four years prior, Trillium’s position was that Pickering’s claim had been discovered or was discoverable well beyond the limitation period. The motion judge held that only the portion of Pickering’s claim occurring more than two years before the action was brought was barred by the Limitations Act, 2002. Trillium appealed this finding to the Ontario Court of Appeal.

Dispute and Ruling

Trillium submitted that its breach under the lease was complete on the first day it failed to resume the occupation and operation of its business in the premises, characterizing each subsequent day that it failed to do so as an instance of additional damages rather than as a separate breach. The Court rejected this submission, noting that as a consequence of a continuous breach of contract the innocent party is provided the opportunity to either affirm or cancel the lease. As Pickering had never elected to cancel the lease, the lease remained in full effect until the end of its term. Had Trillium chosen to resume its obligations under the lease at any time, Pickering would have been bound to accept Trillium’s performance. The Court concluded that in that case, Trillium would have been liable for damages solely from the time it vacated the premises until it resumed occupation, and would not have incurred liability beyond that date. The extent of Trillium’s liability could not have been discovered on the first day of its vacancy.

Although the Court accepted Trillium’s submission that a cause of action accrues once damage has been incurred, the Court held that the accrual of a cause of action is not determinative for the purposes of establishing the appropriate limitation period in the context of a continuous breach of contract. A fresh cause of action had accrued against Trillium for each day of the continuous breach, and Pickering’s discovery of its claim had occurred in parallel. The Court determined that the limitation period applied on a rolling basis for every individual day that Trillium continued to be in breach of its covenants under the lease. Despite the fact that Pickering knew Trillium had ceased to occupy the premises over four years prior, the application of the rolling limitation period resulted in Pickering’s ability to seek compensation for the portion of the continuous breach occurring up to two years prior to the day it commenced its action.

Takeaway for Parties to Commercial Leases

Covenants imposing continuous performance are common. When serious breaches of such covenants occur the innocent party has the privilege of re-evaluating the costs and benefits of affirming or cancelling the lease. As illustrated in Pickering Square Inc. v Trillium College Inc., parties in breach should also conduct this analysis in order to appreciate the consequences of an action or omission on their business. Where a breach is continuous, the relevant limits of liability and discoverability are not fixed at the first date of the breach. Pickering Square Inc. v Trillium College Inc. confirms that parties may be entitled to seek a monetary remedy for the segment of a continuous breach that occurs within the statutory limitation period, even where the breach originally began outside this limit.

[1] Pickering Square Inc. v Trillium College Inc., 2016 ONCA 179, 2016 CarswellOnt 2929.

[2] Limitations Act, 2002, SO 2002, c. 24, Sched. B.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2017

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Jason Annibale
Similar Articles
Relevancy Powered by MondaqAI
Affleck Greene McMurtry LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Affleck Greene McMurtry LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions