Case snapshot
At a glance
- Case
- Can a Landlord Get Default Judgment for Future Rent in Ontario?
- Court / Tribunal
- Ontario Superior Court of Justice
- Citation
- 2026 ONSC 5373 ↗
- Date
- September 28, 2026
- Area of law
- Litigation Law
- Key issue
- Whether a commercial landlord can obtain default judgment for future rent and lease damages without admissible evidence of mitigation efforts and actual rental value.
- Outcome
- The motion for default judgment was dismissed without prejudice, meaning the landlords may refile with proper supporting evidence.
- Why it matters
- Commercial landlords and tenants need to understand that a tenant's failure to defend a lawsuit does not automatically entitle the landlord to the full amount claimed — damages still have to be proven.
Legal principle
The rule from this case
When a defendant is noted in default in Ontario, they are treated as having admitted the facts in the plaintiff's pleading. But that deemed admission does not automatically translate into a damages award. For any claim involving unliquidated damages — amounts that are not a fixed, pre-determined sum — the court still requires the plaintiff to prove the quantum of loss through admissible evidence. For a terminated commercial lease specifically, the proper measure of damages is unpaid rent to the date of breach, plus the present value of rent for the remaining lease term, minus the actual rental value of the property over that same period. This means a landlord must show what the space is actually worth on the open market and what reasonable steps were taken to find a replacement tenant. Without that evidence, the court cannot calculate the true loss.
Important limits
What this does not mean
This decision does not mean a landlord can never recover future rent from a defaulting commercial tenant. The motion was dismissed without prejudice, which means the landlords can return to court once they have gathered the right evidence — including proof of mitigation efforts and market rental values. The ruling also does not change the basic rule that a defendant noted in default is deemed to have admitted the facts pleaded against them. What it clarifies is that deemed admissions go to liability, not to the dollar amount of the loss. A landlord still has to do the evidentiary work to establish what the damages actually are, even when the other side is not in the room to contest them.
Can a Landlord Automatically Win a Default Judgment for Unpaid Rent?
No — not automatically. When a tenant stops defending a lawsuit, Ontario courts still require the landlord to prove the amount of money owed through admissible evidence. The tenant’s silence gets the landlord past the question of whether there was a breach, but it does not set the dollar figure for them.
In CF/Realty Holdings Inc. et al v. Shop With Safe Inc, 2026 ONSC 5373 (CanLII), the Superior Court of Justice dismissed a motion for default judgment brought by two commercial landlords against a tenant who had been noted in default. The court found the affidavit evidence filed in support of the motion was not sufficient to justify an award of damages.
What Is the Difference Between Liquidated and Unliquidated Damages?
Liquidated damages are a fixed, calculable sum — for example, a specific amount written into a contract as a penalty. Unliquidated damages are amounts that require the court to assess and calculate the actual loss, which is the case for most commercial lease claims.
Under Ontario’s Rules of Civil Procedure, a defendant noted in default is deemed to have admitted the facts in the statement of claim. That deemed admission is enough to establish liability for liquidated claims. But for unliquidated claims, the court must still receive proper evidence and make an independent determination of the amount. Future rent falls into this second category.
How Are Damages Calculated for a Terminated Commercial Lease?
The correct legal formula for a terminated commercial lease has three parts: unpaid rent up to the date the lease was terminated, plus the present value of rent for the rest of the lease term, minus the actual rental value of the space over that remaining period.
The third part — actual rental value — is where many landlord claims run into difficulty. A court cannot simply accept the face value of the lease as the measure of loss. It needs evidence of what the property is actually worth on the open market so it can calculate the true shortfall. In this case, that evidence was missing.
Does a Landlord Have to Try to Find a New Tenant?
Yes — mitigation is a real obligation, not a formality. A landlord claiming future rent losses must show what steps were taken to re-let the space and what the market conditions were at the time. The court will look at how long it would reasonably take to secure a replacement tenant and at what rent.
The landlords in this case provided no evidence of mitigation efforts. There was nothing before the court about the rental market, efforts to advertise the space, or any offers received from prospective tenants. Without that information, the court had no basis to determine whether the claimed future losses were reasonable or inflated.
What Was Wrong With the Affidavit Evidence Filed?
The affidavit evidence was found to be insufficient in several ways. Some statements were based on hearsay or information and belief without identifying the source. Other statements were conclusory — they asserted conclusions rather than setting out facts the court could assess. Exhibits attached to an affidavit do not prove the truth of their contents simply by being attached; the affiant must give evidence about what those documents show.
Ontario’s Rules of Civil Procedure set clear requirements for affidavit evidence used on motions. Courts apply these rules even when the other side is not there to object. A default judgment motion is not a rubber stamp — it is a judicial determination, and the evidence has to meet the standard.
What Happens Now That the Motion Was Dismissed?
The dismissal was without prejudice, which means the landlords are not barred from trying again. They can gather the missing evidence — market rental information, records of mitigation steps, properly sourced affidavit statements — and bring a fresh motion.
This outcome is a reminder that default judgment motions in commercial lease cases require careful preparation. Our Ontario litigation lawyers regularly assist landlords and tenants in understanding what courts actually require when a lease dispute ends up in court.
Questions and Records to Discuss With a Lawyer
- What steps have been taken to re-let the property, and is there documentation of those efforts?
- What is the current market rental value for the space, and how can that be established with admissible evidence?
- Are there any lease provisions — such as acceleration clauses or agreed damages — that might affect how the claim is structured?
- What is the source of each fact in the supporting affidavit, and can that source be identified and verified?
- Has the full amount of unpaid rent to the date of termination been separately calculated and documented?
If you are a commercial landlord or tenant dealing with a lease dispute in the Greater Toronto Area or elsewhere in Ontario, the team at UL Lawyers is available to discuss your circumstances. Reach out through /connect to get started.
This article is automated commentary on a public court decision and is for general information only — not legal advice. Decisions rely on facts unique to each case. If you are affected by a similar issue, contact a lawyer for advice specific to your situation.
FAQ
Frequently asked questions
Being noted in default means the tenant is treated as having admitted the facts in the landlord's claim and loses the right to defend. However, the landlord still needs to prove the dollar amount of any unliquidated damages before a court will grant judgment.
Yes, but the landlord must provide evidence of the actual rental value of the property and what steps were taken to find a new tenant. The claim is not simply the face value of the remaining lease payments.
Mitigation means the landlord's legal obligation to take reasonable steps to reduce their losses — typically by trying to re-let the property. A failure to show mitigation efforts can reduce or eliminate a claim for future rent.