Ontario’s Court of Appeal has again held that a force majeure clause can excuse performance and extend a commercial lease when government lockdowns stop a landlord from providing premises for their contracted use. In LAF Canada Company v. Woodbine Highway 7 Retail Inc., 2026 ONCA 708, released October 6, 2026, the Court dismissed a Markham landlord’s appeal and left in place a 348-day rent-free extension for a fitness-facility tenant that had already paid rent through the COVID-19 closures. This is general information about a published decision, not legal advice for your lease.
The case in plain terms
Woodbine Highway 7 Retail Inc. leased space in Markham to LAF Canada Company for a health club and fitness facility. Government COVID-19 restrictions shut that facility for 348 days. The tenant kept paying rent during the shutdown. The application judge ordered that the lease’s force majeure clause extended the lease for those 348 days without further rent, because rent for that period had already been paid. The landlord appealed. A unanimous Court of Appeal (Thorburn J.A., Gomery and Dawe JJ.A. agreeing) dismissed the appeal.
Citation and where to read it
Citation: LAF Canada Company v. Woodbine Highway 7 Retail Inc., 2026 ONCA 708 (Thorburn J.A.; Gomery and Dawe JJ.A. concurring), released October 6, 2026. Docket COA-25-CV-1140. Appeal from 2025 ONSC 3914.
Read the reasons: Court of Appeal (Lexum) · CanLII
What the lease said
The lease’s primary uses were for operating a health club and fitness facility within the premises, including in-person activities such as weight training, group classes, and related amenities. The landlord demised the premises subject to those terms. The force majeure clause (s. 22.3) said that if either party was delayed, hindered, or prevented from performing an act required under the lease because of “restrictive laws,” performance was excused for the delay and the period for performance was extended for an equivalent period.
What the Court decided
The Court treated the appeal as contractual interpretation: mixed fact and law, reviewable for palpable and overriding error.
It held that no separate contractual breach by the landlord was required to trigger force majeure. Two things mattered: (1) a party was delayed, hindered, or prevented from performing an act required under the lease, and (2) that failure resulted from a force majeure event. “Restrictive laws” were a force majeure event under this lease.
The Court rejected the landlord’s argument that virtual fitness classes could have fulfilled the lease. The text contemplated a facility operated within the premises, and switching to ancillary uses did not match the commercial purpose the parties had agreed. A keep-open clause also showed both sides expected an in-person club in the mall.
The landlord’s core duty was to provide premises for use as a fitness facility. COVID restrictions made the premises unfit for that primary use, so force majeure applied. Because the tenant had already paid rent for the 348 closed days, it owed no rent for the matching extension. The landlord did not need to have locked the doors itself; government-mandated closure was enough.
Why Niagara still matters
The Court said Niagara Falls Shopping Centre Inc. v. LAF Canada Company, 2023 ONCA 159, was determinative and not wrongly decided. That case involved the same tenant, similar COVID restrictions, and a substantively similar force majeure clause. There, too, lockdowns prevented the landlord from providing premises for in-person fitness use. The fact that the landlord did not personally impose the closure did not change the analysis.
Cases about quiet enjoyment, relief from forfeiture, or situations where a party could still perform (for example, paying money) did not displace that reasoning on these facts.
Who this affects
Commercial landlords with Ontario leases that tie rent to a specific in-person use, and that include a force majeure clause extending the term (or excusing rent) when “restrictive laws” or similar events block performance.
Commercial tenants, especially those in fitness, hospitality, retail, and other sectors where the lease defines an on-site primary use, when government orders make that use impossible.
Anyone drafting or renewing a commercial lease in Ottawa or elsewhere in Ontario. The result turned on this lease’s wording. The Court stressed that the rent-free extension was what the parties had contracted for when force majeure was invoked, not a new judge-made duty for every landlord.
Practical takeaways
Force majeure is clause-specific. Outcomes follow the text you signed, read as a whole against the lease’s commercial purpose.
Primary use drives the analysis. If the bargain is an in-person business “within the premises,” remote or ancillary uses may not cure a lockdown.
No intentional landlord interference is required under a clause like this one when restrictive laws stop the contracted use.
Rent already paid for closed days can mean the extension runs rent-free for the matching period, if that is how the clause works.
Niagara remains the leading Court of Appeal guide for fitness-style COVID force majeure disputes with similar wording.
Drafting still matters. Parties who want a different risk allocation (rent abatement only, no term extension, explicit pandemic carve-outs, or tenant-only force majeure) need clear words before the next disruption.
FAQ
Does every Ontario commercial lease get a rent-free COVID extension?
No. This decision turns on the force majeure wording and the lease’s primary-use terms. Other leases, and other kinds of clauses, can produce different results.
Is this only about gyms?
The facts were a fitness facility, and Niagara was too. The Court’s method (read the primary use, ask whether restrictive laws prevented that use, then apply the clause) can matter for other in-person commercial uses with similar drafting.
What should Ottawa landlords and tenants do now?
Pull the force majeure, use, keep-open, and rent clauses in current leases. If you are negotiating a renewal or a new deal, decide in writing who carries pandemic and government-order risk. Our real estate and commercial litigation teams advise on lease drafting and disputes.
Talk to us
Francis Lawyers specializes in commercial real estate and civil and commercial litigation for Ottawa businesses and property owners. If a force majeure dispute, lease renewal, or lockdown loss is on your desk, contact us or call (613) 226-1011.
Written by the lawyers of Francis Mehr LLP. Posted October 13, 2026. This article summarizes a published Ontario Court of Appeal decision for general information. It is not legal advice. Outcomes depend on your lease wording and facts. Consult a lawyer about your situation.