In Wadhwa v. Jindal, 2026 ONSC, the Court addressed a novel issue in the commercial leasing context: whether the conversion of a fixed-term lease to a month-to-month tenancy can amount to a forfeiture, such that relief from forfeiture may be available.
The dispute arose after the tenant missed one rent payment beyond the contractual grace period, the first such missed payment in approximately seven years. The landlord attempted to change the locks and took the position that the breach either terminated the lease or, alternatively, converted the tenancy from a five-year fixed term to a month-to-month arrangement. Because the dispute concerned the tenant’s business premises, the tenant obtained an injunction restraining the landlord from acting on the breach.
The tenant then sought relief from forfeiture under the Commercial Tenancies Act and the Courts of Justice Act. Justice Cudjoe rejected the landlord’s position, finding that the loss of the five-year lease’s protection constituted a forfeiture. In granting relief, the Court emphasized that the late payment was inadvertent, the tenant acted promptly to cure the breach, the landlord was made whole within a day, and the consequences to the tenant would be harsh and unjust.
The Court declared that the lease remains valid and enforceable, meaning it was not terminated and was not converted to a month-to-month tenancy. The Court found that the tenant was the successful party and is entitled to costs.
This decision is significant for commercial leasing disputes because it confirms that the Court will consider the practical consequences of a breach, rather than relying solely on the wording of the lease. The focus remains on substance over form, assessing the seriousness of the breach, the parties’ conduct, any prejudice to the landlord, and the proportionality of the consequences imposed.
