BREACH OF CONTRACT FRAMEWORK What types of damages are available for breach of contract? 1. Compensatory a.

Expectation interest (but for breach) i. General rule of damages for breach of contract is that the plaintiff ought to be placed, so far as money can place the plaintiff, where he or she would have been had the K been performed (Bowlay) 1. Note: most commercial K are entered into with a view to making future profits, therefore, future profits would be in the contemplation of parties when entering a commercial K (Canlin) 2. Note: An award for loss of profits should be awarded on a net profit basis (Ticketnet) 3. Note: the plaintiff bears the onus of proving loss of perspective profits (Canlin) ii. Where a breach of contract resulted in no monetary loss or loss of profits, and the only loss was information that would have been gained but for the breach, the wronged party can recover the cost of doing the work as compensation (Sunshine Exploration) iii. How are damages assessed in a fixed contractual context (i.e. not a K aimed at profits, but more so for private use (SWIMMING POOL CASE)? (Ruxley) 1. Cost of correcting/replacement a. Where it is reasonable for the person to insist on reinstatement that will be the measure of damages b. To determine if reinstatement is reasonable: i. Does the P have a genuine interest to do the work, and ii. If doing the work is a reasonable thing to do 2. Market value of the asset a. But for the breach you would have had something worth more money 3. Loss of amenity a. Loss of enjoyment iv. Note: expectation interest damages can include damages for intangible injuries such as mental distress and humiliation if caused by Ds actions (Waddams, The Law of Damages) b. Reliance interest (but for contract) i. Where the plaintiff has, in reliance on the promise of the defendant, changed his position, damages may be available 1. The defence: say it was a losing proposition and advocate for the remedy but for the breach ii. When is the reliance interest available? 1. Reliance interest IS NOT available for an unprofitable venture to recoup their expenses because the plaintiff made a bad bargain (Bowlay); onus on D to establish this was a losing bargain (Bowlay) a. Why? P cant be put in a better position than they would have been if the K was performed b. Note: you could still recover additional losses specifically attributed to the breach, but the court will not allow parties to get out of a bad bargain due to the breach 2. If the breach went to the root of the contract to deny the plaintiff the opportunity to receive the profits they contracted for, and the future profits they would have obtained are too speculative to

3. c.

determine, then the court may award damages for reliance interests (Sunshine Vacation Villas) a. Here, damages were assessed as the capital costs incurred by P up until breach by D Summary: so only use reliance interest if the plaintiff has not suffered any loss of profits, or if they cannot prove what their profits would have been (Angila)

2.

Aggravated i. In all contractual cases, results are based on what was in the reasonable contemplation of the parties at the time of K formation (Hadley as discussed in Fidler) ii. Generally, mental distress damages are not recoverable for breach of contract (Addis) 1. Peace of mind exception if parties, at the time of entering the contract, contemplated that a breach could cause mental distress, damages for mental distress can be awarded (i.e. an insurance contract) (Fidler) a. Plaintiff must prove: i. That an object (doesnt need to be the sole object) of the contract was to secure a psychological benefit, and ii. The degree of mental suffering caused by the breach was enough to justify compensation iii. In the employment context, generally no damages available for pain/suffering or distress unless the employee can prove that the manner of dismissal caused mental distress. Namely, where the employer engages in unfair or bad faith acts during the course of dismissal (Honda) 1. Aggravated damages must be grounded in proof of actual damages resulting from the unfair or bad faith conduct in the manner of dismissal (Elgert) iv. No aggravated damages can be awarded to a corporation (Thomas Management Limited) v. In tort, aggravated damages can be awarded in circumstances where Ds conduct has been particularly high-handed or oppressive (Hill) 1. NOTE: must be a finding that the defendant was motivated by actual malice (Hill) d. Restitution i. The general rule was that restitution was not a remedy for breach of contract (Asamera), but exceptions have been carved out of the general rule giving a plaintiff an opportunity to claim restitution: 1. When equity is engaged (e.g breach of K but also breach of fiduciary duty) (Wrotham Park) 2. When other remedies are inadequate and the P has a legitimate interest in preventing Ds profit making activity (Blake) 3. The wrongdoer has profited in excess of the amount they would have had the contract been performed, and the plaintiffs loss is less than the defendants gain (Bank of America) Non-compensatory a. Punitive i. Punitive damages are limited to circumstances in which the misconduct represents a marked departure from ordinary standards of decent behaviour (Elgert) 1. Punitive damages are only to be used in exceptional cases (Elgert) 2. They are a form of extra deterrence when general/aggravated damages are not enough (Hill)

ii. In order for punitive damages to be awarded for breach of contract, there must be a separate actionable wrong (Whiten) 1. In Whiten, the first breach was refusing to pay out insurance proceeds, second breach was breaching the duty to act in good faith At what point in time should damages be assessed? 1. 2. The general rule is that damages are to be calculated on the date of the breach of contract unless it is reasonable for the plaintiff to wait in order to mitigate damages (Asamera) If specific performance is available, that revives a contract to the extent that the defendant who has failed to perform can avoid a breach if at any time up to the date of judgment performance is tendered; thus a claim for specific performance has the effect of postponing the date of breach until the date of trial (Semelhago)

Will inflation and interest be considered in awarding damages? (its discretionary under s.2(3) of the Judgment Interest Act) 1. 2. Traditionally, courts were reluctant to award interest because there were too many variables at play to accurately award interest (Leitch Transport) Statutory intervention introduced to get away from Leitch: Judgment Interest Act a. Part 1 prejudgment interest i. Interest is calculated from the date the cause of action arose to the date of the judgment 1. 4(1)Non-pecuniary damages calculated at 4% interest per year 2. 4(2) Pecuniary damages at prescribed rate b. Part 2 post-judgment interest i. 6(2)Judgment debt bears interest on date it becomes payable notwithstanding there may be an outstanding appeal ii. 6(2)Interest is calculated at prescribed rate

Is there anything to keep in mind that might limit/reduce the damage award? 1. Remoteness a. Leading case on test for remoteness is Hadley v. Baxendale i. Were the damages reasonably in the contemplation of both parties at the time they made the contract? b. The plaintiff only needs to prove the defendant could forsee the general result, not the exact injury (Uttley) i. In loss of profit cases, the defaulting party is only liable for consequences if they were/ought to be contemplated as a serious possibility at contract formation(Uttley) ii. In physical damage cases, the defaulting party is liable if it was reasonably foreseen as a slight possibility at date of breach(Uttley) c. Secondary transactions do not fall within the ambit of reasonable forseeability (Kinzle) Uncertainty a. Loss of a chance is compensable and the evidentiary difficulty of quantify that chance doesnt mean the court can avoid the task (Chaplin) b. What the P must prove: i. On a BOP that but for the breach, the plaintiff had a chance to obtain an opportunity/benefit, or avoid a loss ii. That lost chance was sufficiently real and significant to rise above mere speculation iii. The lost chance had some value c. The defence: showing the chance would not have materialized Mitigation

2.

3.

a.

b. c.

d.

A P must take reasonable steps to avoid unconscionable accumulation of damages (Red Deer College), but does not need to take ALL possible steps to reduce their loss (Asamera) i. It is context specific Reasonable costs of mitigation are compensable damages (Ticketnet) What if buddy is scared to get treatment? i. A plaintiff cannot make unreasonable decisions in regard to medical treatment (Janiak) 1. Burden on D to prove plaintiff didnt mitigate loss a. Plaintiff jutt needs to show they follow any one of several recommended treatments by medical advisors There is no duty to mitigate when specific performance is claimed

Should I seek specific performance? 1. Goods and service contracts a. Court has the power to order specific performance (s.51 Sale of Goods Act) b. The exercise of specific performance is a discretionary remedy, and the court will exercise this discretion when it is reasonable to do so (Falke) i. What is reasonable depends on the facts of each case (Butler) ii. Factors to consider in awarding specific performance of goods and service contracts (Butler) New Zealand decision: 1. Plaintiffs autonomy to choose remedy a. Plaintiff has been wronged, therefore should have choice of remedy. Be careful not to over-compensate by a performance-based remedy 2. Economic Efficiency 3. Relative severity of the remedy on the parties a. Should be proportional for both parties 4. The nature of the right being supported by the remedy a. The stronger the plaintiffs right, the stronger the remedy which may be required 5. The moral view to be attached to the interests at stake 6. The effect of a given remedy on a third party 7. Difficulties of calculation a. Performance based remedies may avoid complex damage problems 8. Practicability of enforcement a. Even if difficult to enforce, this should not be an automatic bar to performance-based relief 9. Conduct of the parties a. This will always be one of the great cornerstones of equitable relief Land Contracts a. Traditional view: monetary relief constitutes the normal remedy to compensate for breach of contract. Only where this remedy is inadequate will a court decree specific performance (Domowicz) i. Specific performance, however, is generally seen to be presumptively available to enforce contracts for the purchase and sale of land (Domowicz) 1. Why? Inadequacy of damages is assumed because no two properties can be identical ii. However, the presumption is rebuttable (Domowicz) 1. You need to scrutinize the transaction to determine if damages are adequate

2.

b.

Now, before a plaintiff can rely on a claim to specific performance so as to insulate himself from the consequences of failing to procure alternate property in mitigation of his losses, some fair, real and substantial justification for his claim to performance must be found (Asamera quoted in Semelhago) i. No longer is it assumed you can get specific performance if a land contract is breached it is fact specific and you must show that damages are inadequate (ie. the property is unique, sentimental value, etc.) (Raymond)

PERSONAL INJURY FRAMEWORK What kinds of damages are available? 1. Non-pecuniary damages designed to compensate three areas: loss of amenities, pain and suffering, and loss of expectation of life (Andrews) a. $100,000 is the upper limit save in exceptional circumstances (Andrews and affirmed in Lindal) b. Awards are not dependent on seriousness of injury alone, but rather on ability to ameliorate the condition of the victim i. NOTE: non-pecuniary losses not available to non-sentient beings because they cannot benefit from the solace these damages are intended to provide (Knutson) ii. NOTE: if there is medical evidence of potential improvement, nonpecuniary damages can be awarded (Knutson) Special damages (pre-trial expenses) a. These must be reasonable and caused by the accident (Andrews) b. Two categories i. Pre-trial loss of working capacity 1. If youre self employed, use last years income as guide (Forward v. Flaman) 2. In unemployed, include EI benefits (Guthmiller) ii. Pre-trial cost of care 1. Cost of care should not be reduced because its provided by a relative instead of a professional (Bain) Pecuniary damages a. Loss of earning capacity what would have been earned but for the accident (Pre-accident life expectancy) (Andrews) b. First, we must determine what their pre-accident earnings would be i. If dealing with an adult/older child: 1. Plans to follow a particular career path? a. Give deference to these plans (MacCabe) 2. Employment history isnt helpful in calculating future employment? a. Set a reasonable estimate of earning capacity (Penso) 3. If the person is a homemaker, replacement cost is generally the accepted approach (Byron v. Larson) a. You dont need to show an actual loss if someone does the work you did for free (Shelest) ii. If dealing with children/infant: 1. Think T-funnel global, parents/surroundings, individual circumstances (start at bottom and move up) a. NOTE: In Teno, this approach wasnt followed, but it has been followed in subsequent decisions (ie. Houle v Calgary, ABCA decision) b. Global would be actuarial evidence (ie. gender, geographical location etc.) 2. Its fair to say that children will not be public charge (Teno) 3. Look at individual plaintiff and their circumstances insofar as you can (McCabe) a. Ie. maybe they dont want kids, therefore loss of earning capacity should be higher) 4. Can look at educational attainments of parents/siblings (Dube); other relevant information includes school/motivation, family

2.

3.

income, parents occupation/education/income, plaintiffs IQ, social class, stability of family life (Houle) iii. Length of working life 1. This is to be determined based on length before the accident, not after (Andrews) 2. Normal working span: 20-65 (Teno) iv. NO TAX DEDUCTION FOR LOSS OF EARNING CAPACITY (except in Alberta because of the Insurance Act) c. Cost of future care new needs that have arisen due to the accident i. Can the plaintiff choose the care they want? YES 1. The plaintiff should have their choice of care, and they need not mitigate their situation, but can choose whats best for them (Andrews) a. Must be reasonable in their choice, not extravagant b. It is fine to choose home care over less expensive institutional care where it is the optimal solution (Watkins v. Olafson) ii. Limitations: 1. The cost of future care is determined by looking at the plaintiffs post accident life span (ie. life expectancy should be that of quadriplegics) (Andrews) d. Overlap between cost of future care and loss of working capacity i. We must deduct ordinary expenses that are not causually connected to the accident (ie. necessities of life food, shelter, clothing etc.) from the damages for future working capacity (Andrews) 1. Usually between 30-50% is normal ii. Note: no deductions are to be made from benefits of private insurance e. Contingencies i. These are to be determined on a case by case basis, so no more automatic contingency deductions (must be based on evidence) (Penso) 1. Note: 20% seems to be maximum contingency deduction absent unusual factors (Penso) ii. Actuarial advise is helpful and should be relied on when possible f. Discount Rate do this because awards for personal injury are lump sum payments i. Must consider rate of return and inflation (Andrews) g. Management Fees i. Management fees may be awarded where the plaintiff does not have capacity (ie. age, mental incapacity etc.) to manage a damage award, whether or not the lack of capacity is part of the accident (Manduzuk) 1. NOTE: in Townsend, the damage award was not discounted where smart investments would be made due to the award of a financial manager h. Taxation i. Income tax is not taken into consideration when calculating an award for loss of earning capacity (Jennings) ii. However, in Alberta, the Insurance act overrides Jennings and Albertans pay tax on damages award from loss of earning capacity (s.626.1(2)) 1. Note just say with reference to earnings 2. Argue, by including those words, intending to exclude nonpecuniary form being taxed

WRONGFUL DEATH FRAMEWORK Similar to Andrews framework for personal injury (Keizer); big difference is that an award for loss of income under the FAA is subject to tax Although the act is often spoke of as compensation for loss of dependency (Taguchi), no section specifically refers to this, but it is a general principle of the act Look at loss of future dependency (about partners loss of income) and subtract for all the contingencies (divorce, remarriage) (Taguchi) NOTE: court must look at facts of each case and strength of marriage Court can award household services under s.2 of FAA Non pecuniary losses are dealt with under s.8 (damages for bereavement) AIP/Spouse gets 75,000 Parents 75,000 (if 2 parents they split this) (includes grandparents/stepparents) Each child of deceased person gets 45,000 (includes step children, grandson, etc.)

S.7 looks at damages that are compensable (ie. travel costs, funeral expenses, grief counseling etc.) NOTE: insurance K will not be taken into effect when assessing damages (s.6)

DAMAGE TO PROPERTY FRAMEWORK What kind of damage can you seek for destruction to property? 1. The starting point is replacement cost if you break my TV you owe me damages equal to the replacement cost of the TV a. Replacement costs should be determined at the time of loss, not time of trial (Jens) b. NOTE: complete restoration is not always reasonable, therefore you may not always get replacement cost (Kates v. Hall) i. Must balance between reinstatement and reasonableness You can seek additional compensation for destruction of property: a. Compensation for time lost i. If you used the property to create profit, damages should include lost profits arising from damage (Liesbosch) 1. NOTE: if there is delay in replacing damaged property, defendant is on the hook for lost profits suffered as a result (Liesbosch) ii. Court will look at three factors (Liesbosch): 1. Market price of a comparable item 2. The cost of adaption/transport/insurance 3. Compensation for disturbance and loss in carrying out other contracts between damage and the arrival of the new piece of equipment b. Betterment if the damaged item cannot be replaced, defendant should be liable for costs of repair i. The test is reasonableness (James Street Hardward) 1. The plaintiff is entitled to indemnification, if that indemnification is impossible without betterment the plaintiff should not have to bear those costs 2. Burden is on the defendant to establishment betterment, then plaintiff bears the burden of showing that they had to better their position to affect indemnification ii. How do we determine what is reasonable? 1. Based on the advantage to the plaintiff vs the extra costs to the defendant (Jens) a. NOTE: in jens, reduced amount of award by depreciation because this was discernable through evidence What if there is no damage to the property? (i.e. trespass) a. Injunctive relief is the normal course of action when no damage is suffered (Wrotham); but if an injunction is unreasonable damages are available in lieu (Bracewell) i. In Bracewell, it was held that making the Ds home inaccessible by not allowing a right of way on land is unreasonable ii. Damages were assessed at what would have been a reasonable bargain had the parties contracted for the rightaway iii. NOTE: its better to apply for an injunction early so youre not forced to accept a sum for a bargain you never intended on making! b. Entitled to damages of reasonable sum for use of property for the period of dispossession (Costello) i. Note: no duty to mitigate but claimant usually denied recovery for losses they reasonably could have avoided (Costello) ii. Note: even a lessor can recover damages for trespass even if there was no tenant and you cant establish the property would have been rented (Inverugie)

2.

3.

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5.

Punitive damages are available in some instances of property damage (Kates v. Hall) a. Available where a defendants conduct towards Ps property is reprehensible (Townsview) i. NOTE: punitive damages can be awrded in cases of libel (Broome) 1. Was the defendant libelous for reasons of economic gain? 2. Was the gain greater than the loss suffered by the P? 3. Was the libel committed with that knowledge in mind? 4. If yes to these 3, then court can award punitive damages b. Remember, function of punitive damages is to ensure that the D does not treat compensatory damages merely as a license to get its way irrespective of the legal or other rights of the plaintiff (Whiten) What if the wrongdoer gained from their action? a. If the defendant acquires a gain as a result of the injury suffered by the plaintiff, the damage calculation should reflect not only the injury, but the gain as well (Whitwham)

INJUNCTIONS FRAMEWORK 1. What kind of injunctions are available? a. Prohibitive injunction (pre or post trial) i. Orders a person to refrain from specified conduct b. Mandatory injunction (pre or post trial) i. Orders a person to take positive action to right a wrong or repair damage done c. Interim injunction (pre-trial) i. Valid for only a specified period d. Interlocutory injunction (pre-trial) i. Binding until trial e. Quia timet i. An injunction sought before the wrong has occurred What is required to get an injunction (RJR MacDonald) NOTE: this case was for an interlocutory injunction? a. Serious issue to be tried (onus on applicant to prove) i. Minimum level of proof that a substantive legal issue is in dispute 1. Pretty low threshold 2. If its a serious question to be tried, can give way to a strong prima facie test ii. Applicant must demonstrate probability of a successful suit before being granted an interlocutory injunction 1. NOTE: enforcement of a restrictive convenant through an injunction can have bery negative impacts on Ds, therefore, must show a prima facie case before granting relief 2. NOTE: courts are hesitant to grant an injunction to stop a labour dispute, notwithstanding they have authority to, because they operate in a highly politically charged area 3. Note: Courts are hesitant to grant injunctions in defamation actions as it raises serious issues with FOE (courts have authority, but need a strong prima facie case) a. Courts will only interfere by way of injunction to prevent publication of alleged libel in the very clearest of cases (Canada Metal Co) b. Irreparable harm applicant must prove they will suffer loss that cannot be compensated by any other means (onus on applicant to prove) i. Speculative evidence isnt enough; proof must be clear ii. If applicant could take reasonable steps to avoid harm it isnt irreparable iii. Note: it doesnt matter how sever the harm is, what matters is that the harm cannot be repaired (Peshee) 1. Note: being prejudiced in an administrative hearing by the results of another hearing can be irreparable harm (Mott-Trille) 2. Note: if a party suffer permanent marketloss or irrevocable damage to its business reputation, this is irreparable harm (Cantin) c. Balance of convenience i. Ask: does benefit to applicant if granted an injunction outweigh harm it causes other side? ii. Ie. public policy, social utility of Ds conduct etc., Cs conduct (ie. waited too long and something was already built) Procedural shit:

2.

3.

4.

5.

6.

7.

In almost every case, court will require that the party who has been granted the interlocutory injunction make an undertaking for damages in case the D is successful at trial b. Injunctions are usually on ex-parte basis b/c they need to be done quickly i. Ex parte applications granted only if delay or chance to twart motion too damaging (Ruby) Mareva injunctions a. A type of interlocutory injunction that freezes the Ds assets in order to prevent the defendant from moving their assets to a jurisdiction whereh te plaintiff would be unable to enforce a post judgment award (Mareva) b. The test (from Atena Financial) i. P must have a strong prima facie case that AND the D will remove assets from the jurisdiction OR dissipate those assets in advance of trial c. Mareva injunctions apply directly to the person, not their assets, therefore quite common to have the injunction extended to include other third parties who may also have access to Ds assets Anton Pillar injunctions a. Allows the applicant to seize property or evidence where there is reasonable belief that the D may destroy it before trial b. The testL (Anton Pillar and Celanese Canada) i. Strong prima facie case ii. Damage, potential or actual, must be very serious iii. Clear evidence that the defendants have in their possession incriminating documents or things iv. It must be shown that there is a real possibility that the D may destroy such material before the discovery process c. Note: injunction must explicitly state how the search is to be conducted and what it can include i. NOTE: If Anton Pillar injunction wrongfully obtained or not properly executed it could give rise to compensatory and punitive damages (Harris) Anti-suit injunction a. A form of interlocutory injunction that seeks to prevent one of the parties from pursuing the suit in another jurisdiction (dont want people forum shopping may have better procedural rights in one jurisdiction over another!) b. The test: (Amchem) i. Suit must be pending in another jurisdiction, and applicants in current jurisdiction must first have sought and been denied a stay of proceeding in the other jurisdiction ii. If yes to I, then: 1. Did foreign court apply generally accepted forum non conveniens principles in refusing to grant stay? If not, 2. Would there be an injunctice if claimants were not allowed to proceed in foreign court? c. If no connection between claimaints/case/foreign jurisdiction, then C can have no expectation of any personal or juridicial advantage from suing there (Amchem) d. If there is a connection and claimaint would lose a personal or juridicial advantage, then it must be weighed against Ds loss of advatange (Amchem) Permanent injunctions: a. Quia TImet injunctions i. Injunction is sough before the perceived wrong has occurred or before any damage has been suffered ii. The test : (Palmer) 1. Meet the regular injunction test (threshold + RJR factors) 2. Under the irreparable harm part of RJR, must show strong case of probability that the apprehended mischief will, in fact, arise

a.

8.

9.

Mandatory injunctions (courts favour prohibitive injunctions) a. Require the D to take positive action to right a wrong or repair damage i. Not popular because upfront cost to D before proven liable (cost placed on innocent party) ii. The test (Redland Brick) 1. P must show a very strong probability upon the facts that grave damage will accrue to him in the future 2. Damages will not be a sufficient or adequate remedy if such damage does happen 3. The cost to the D to do the work must be taken into account a. If the D has acted in bad faith then doing positive work to restore status quo can be awarded even if expense is out of proportion b. If the D has acted reasonably, though wrongly, cost of remedying the situation is important to the consideration iii. When granted a mandatory injunction, court must be careful to spell out exactly what is expected of the D as failure to comply can lead to contempt proceedings (Redland Brick) Injunctions to protect property rights a. Owners should not be deprived of the value/use of their land without consent; damages for trespass offer little protection, thus injunctions are the preferred method i. Damages for trespass offer very little protection ii. Note: need to be careful with granting an injunction because it places the plaintiff in a better bargaining position 1. The plaintiff could potentially demand from the D near to the entire cost hat the defendant would incur if they complied with the injunction b. Tresspas is trespass even if the land has no value and cannot be used by the plaintiff (Goodson) i. Injunctions to restrain trespass does not require that the trespass harms the plaintiff (Wollerton) 1. NOTE: here the court suspended the injunction to render it useless, so a court can suspend an injunction to reflect commercial realties 2. NOTE: In National Westminster Bank, injunction granted that didnt cause harm and it wasnt suspended a. Since this ruling the Municipalities Act has allowed for legislation that permits one party to respass onto another parties land for the purposes of necessary repairs to party 1s land c. Alternatives to injunctive relief i. Even though there is an infringement of private property, the Court will not grant an injunction as the costs involved in compliance would be unjust to the defendant (Dempsey) 1. Damages can be a substitute here large building encroached 35 square ft of plaintiffs property ii. Injunctions are at the discretion of the court and are not automatic in instances of trespass, so court must look at al relevant circumstances and come to the most just conclusion given the severity of the trespass and the cost to the D (Gallant) d. Parties to the injunction i. Sometimes impossible to name all parties to an injunction ii. Courts have the power to enjoin unnamed parties to injunctions (McMillan Bloedel)

NOTE: arrest provisions in an injunction are permitted so long as they are reasonable (McMillan Bloedel) iii. NOTE: Bullock case applied rules from McMillan to Occupy Calgary crowd 10. Damages in Lieu of injunction a. The court can award damages in addition to or in substitution for the injunction or specific performance (Judicature Act, s.19)

1.