I. Damages 7
Basic Process for Assessing Damages: 7
Expectation Damages 7
General Principles & Lost Profits 7
Theory and Background (from Fuller & Perdue) 7
Claiming Lost Profits 8
Canlin Ltd v. Thiokol Fibres Canada [1983, ONCA] 8
Problems of Determining the Value of a Bargain: Avoiding Double Recovery 8
R. G. McLean Ltd. v. Canadian Vickers Ltd. [1971, ONCA] 8
M.G. Baer, “The Assessment of Damages for Breach of Contract – Loss and Profit” 9
Doctrine of Election 9
Profit or Capital 9
Overlap of Expenditures and Lost Profits 10
Problems of Proof 10
Ticketnet Corp v. Air Canada [1998, ONCA] – Laskin JA 10
Damages for Breach of K w/ Alternative Modes of Performance 12
Hamilton v. Open Window Bakery [2004, SCC] 12
Durham Tees Valley Airport Ltd. v. bmibaby Ltd. [2010, Eng. CA] 13
Ditmars v. Ross Drug Co. [1971, NBQB] 13
Lewis v. Lehigh Northwest Cement Ltd. [2009, BCCA] 13
Cost of Performance or Lost Market Value 14
Posner – Economic Analysis of Law 14
Efficiency 14
Economic Analysis and Damages 14
Lost Value vs. Cost of Performance 15
The Old Approach: Wigsell v. School for the Indigent Blind, as cited in Radford v. DeFroberville, and McGregor on Damages 15
Megarry V-C in Tito v. Waddell, Four Propositions on Cost of Performance Awards: 15
Radford v. DeFroberville [1977] 16
Cotter 16
Sunshine Exploration Ltd. v. Dolly Varden Mines Ltd. [1970, SCC] 17
Groves v. John Wunder Co. [1939, Minn. SC] 17
Peevyhouse v. Garland Coal Mining Co. [1963, Oklahoma SC] 18
Ruxley Electronics and Construction Ltd. v. Forsyth [1996, HL] 18
Wilson v. Sooter [1988, BCCA] 19
Miles v. Marshall [1975, ON] 19
Summary of Factors re Cost of Performance v. Lost Market Value 19
Starting Points 19
Factors 20
Non-Pecuniary (Aggravated) Damages for Breach of K 20
Basics 20
Addis v. Gramophone [1909, HL] 20
Vorvis v. ICBC [1989, SCC] 20
Policy Concerns 20
Exceptions to the General Rule: Situations in Which Courts WILL Award Non-Pecuniary Damages 21
1. Where Breach of K Causes Significant Physical Inconvenience 21
Hobbs v. Southeastern Railway [1875] 21
Warton [BCCA] 21
2. Psychological Deliverables 21
Jarvis v. Swan Tours [1972, Eng. CA] 21
Farley v. Skinner [2002, HL] 21
Fidler v. Sun Life [2006, SCC] 22
Aggravated Damages 22
Turczinski v. Dupont Heating and Air Conditioning [2004, ONCA] 22
Wallace v. United Grain Growers [1997, SCC] 23
Honda v. Keays [2010, SCC] 23
Reliance Damages 24
General 24
Reliance damages ARE available: 24
Reliance damages ARE NOT available: 24
Where Expected Profits are Not Determinable: 24
Misc Rules on Reliance Damages 25
Reliance Damages for Negligent Misrepresentation 25
Negligent Misrepresentation Damages: Requirements (Hedley Byrne Principle) 25
Application 26
Beaver Lumber v. McLenaghan 26
VK Mason v. Bank of Nova Scotia [SCC] 26
Rainbow Caterers v. CNR 27
Negligence and Reliance in Professional Services 28
Posesorski 28
Messineo v. Beale [1978, ONCA] 28
Kienzle v. Stringer 28
Restitutionary Remedies 29
Basics 29
Remedial Advantages: 29
Established Categories of Restitution Remedy: 30
Requirements for Restitution to be Granted 31
Restitution in Contract 32
Quantum à Various Approaches 33
Punitive Damages 34
Distinguishing Between Some Common Types of Damages 34
When are Punitive Damages Available? 35
Concerns 35
The UK Position 35
Broome v. Cassell [1972, HL] 35
Canadian Jurisprudence 36
US Jurisprudence 37
II. Limiting Factors 37
Intro to Limiting Factors: 37
Remoteness 38
Hadley v. Baxendale 38
Parsons (Livestock) Ltd. v. Uttle Ingham [1978, QBCA] 39
Kienzle v. Stringer [1981, ONCA] 39
Matheson v. Canada [2000, NSCA] 40
Summary of Remoteness 40
Mitigation 41
Basics 41
Cockburn v. Trusts Guarantee Co. 41
Apeco v. Windmill 42
Erie County Natural Gas v. Carroll [HL] 42
Jamal v. Moola Dawood Sons & Co. [1916, PC (Burma)] 43
Campbell Mostyn v. Barnett Trading 43
Time of Assessment 43
Asamera Oil Corp. v. Sea Oil and General Corp. [1979, SCC] 43
Dodd Properties v. Canterbury City Council [Eng. CA] 44
Perry v. Sidney Philips [1982, Eng. CA] 45
Damages in Lieu of Specific Performance 45
Wroth v. Tyler [1974, Eng.] 46
Semelhago v. Paramadevan [1996, SCC] 46
Specific Performance in Real Estate Ks 46
Background 47
Domowicz v. Orsa Investments Ltd. [1993, ON Gen. Div.] 47
McNabb v. Smith [1982, BCCA] 47
Semelhago v. Paramadevan [1996, SCC] (continued) 47
John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. [2001, ONSC] 48
Earthworks 2000 Design Group Inc. v. Spectacular Investments (Canada) [2005, BCSC] 48
Raymond v. Raymond Estate [2011, SKCA] 48
Measurement Issues: Reinstatement or Diminution 49
Damage to Chattels 49
Dewees v. Morrow [1932, BCCA] 49
Darbishire v. Warran [1963, Eng. CA] 49
O’Grady v. Westminster Scaffolding Ltd. [1962, QB] 49
Factors to Consider Re Reinstatement for Damage to Chattels: 50
Damage to Real Property 50
Taylor v. Hepworths Ltd. 50
Jens v. Mannix & Co. [1978, BCSC] 50
Kates v. Hall [1991, BCCA] 51
Betterment 51
James St. Hardware v. Spizziri [1987, ONCA] 51
Safe Steps 52
Fontaine v. Roofmart Western Ltd. [2005, MBQB] 52
III. Remedies for Personal Injury 52
Context: The Role of Tort in Dealing with Disability 52
Andrews (The “Trilogy”): Overview of Methodology 53
Lump Sums: Finality vs. Accuracy 53
Advantages and Disadvantages 53
Discounting 53
Theoretical basis: 54
The Trilogy Mistake: 54
Law and Equity Act 54
Non-Pecuniary Losses 55
The “Insurance Crisis”: 55
New Theoretical Basis – The Functional Approach 55
As Opposed To: 55
Basics of the Functional Approach 56
The Cap 56
Logical Conclusions of the Functional Approach 56
Problems with the Canadian Approach 56
Alternatives 57
Pecuniary Losses: Lost Future Earnings 57
Step 1: Estimate the level of earnings 57
Step 2: Consider length of working life 57
Lost Years 58
Step 3: Factor in Contingencies: 58
Step 4; Account for Residual Earnings 58
Step 5: Deduct for Any Overlap with Cost of Care 59
Step 6: Factor in Collateral Benefits 59
Step 7: Discount to Present Value 59
Note: Issue of Taxation 59
Theoretical Justification 59
Practical Justification 59
Past Loss 59
Compensating Future Losses of Children & πs who did Unpaid Work 60
Issues of Fairness 60
Addressing these Issues: 61
Compensating Household Services: 61
Compensating Unwaged Work (or Underemployment) 62
Charitable and Religious Organizations 62
Turenne 62
Cost of Care 62
Step 1: Assessment of Need 62
Step 2: Determination of Standard by Which Needs should be Met 62
Mitigation 62
Test of Reasonable Expenditure 63
General Notes on Determination of Standard 63
Step 3: Project Need and Standard into Future 63
Contingencies re Needs and Levels 63
Step 4: Deductions and Adjustments 64
Mitigation 64
Objective Test: Assessing What a Reasonable Person Would Do 65
Thin Skull Situations 65
Collateral Benefits 66
Categories of Collateral Benefits: 66
1. Voluntary Family Care 66
2. Charity 66
3. Private Insurance 66
4. Employment-Based Benefits 66
5. Public Benefits 67
(a) Social Welfare 67
MB v. BC [SCC] 67
(b) Publicly Funded Care Programs 67
(c) Health Care Costs 68
(d) Employment Insurance – Repayment 68
Subrogation 68
How Does it Work? 68
Structured Settlements as an Alternative to the Lump Sum 71
Fatal Accidents 72
Basics 73
Theory of Compensation 73
Who Can Recover? 73
Valuing the Dependency 74
Non-Pecuniary Losses 74
IV. Injunctions 75
Introduction 75
Framework: Categories of the Law of Remedies 75
Liability Rules 76
Property Rules 76
Inalienability Rules 76
Timing of Injunctions – Three Options: 76
Scope of Injunctions: Three Options 77
Quia Timet 77
Mandatory Injunctions 78
Permanent Injunctions à Injunctions to Protect Property Interests 79
Possible Alternatives to Permanent Injunctions in Real Estate Cases: 80
1. Live and Let Live 80
2. Modify the Property Rights 80
3. Remedial Alteration 80
4. Statutory Intervention à BC Property Law Act 81
Injunctions to Address Nuisance 81
Injunctions to Address Public Rights 83
1. Who Can Seek an Injunction to Enforce Public Rights? 83
2. How Will Courts Exercise Their Discretion re Whether to Grant Injunctions in This Context? 84
Concerns 84
When Can a Public Rights Injunction be Obtained? 84
AGAB v. Plantation Indoor Plants 84
Robinson v. Adams [1924, ON] 84
AGBC v. Couillard 85
AGNS v. Beaver 85
Reconciling Couillard and Beaver? 85
Interlocutory Injunctions 85
General 86
Introduction & Context 86
Jurisdiction & Procedures 86
Law and Equity Act s. 39 86
BC Supreme Court Civil Rules: 86
New Approach: Balancing the Risks 87
American Cyanamid 87
Test for Interlocutory Injunction per American Cyanamid: 88
Nuanced Analysis of the Situation – Other things to Consider 88
Final Determination 88
Pure Question of Law 89
Mandatory Injunctions [see below] 89
Restrictive Covenants [see below] 89
Free Speech 89
No Undertaking 89
Assessing “Irreparable Harm” 89
Yule Inc v. Atlantic Pizza Delight Franchise 90
David Hunt Farms Ltd. v. Canada (Minister of Agriculture) [1994, FCA] 90
Mandatory Interlocutory Injunctions 91
Undertakings 91
Injunctions in Relation to Contract Law 92
Contract Injunctions Generally 92
Yule v. Atlantic Pizza 92
What about at Trial? 93
Questions about Fothergill Set the Stage for More Assertive Injunctions: 93
Vancouver Island Milk Producers v. Alexander [1922 BCCA] 93
Metropolitan Electric Supply v. Ginder 94
Thomas Borthwick 94
How does this Mesh With the Concept of Efficient Breach? 95
Assessing whether to grant a K Injunction: 95
Using Injunctions to Enforce Restrictive Covenants 95
Restrictive Covenants in Sale-of-Business Contracts 96
Cantol v. Brodi Chemicals Ltd. 96
Towers v. Cantin 96
Other reasons why injunctions are more readily given in this context: 96
Restrictive Covenants in Employment Contracts 96
Lumley v. Wagner [1852, Eng.] 97
Warner Brothers v. Nelson [1937, Eng.] 97
Detroit Football Club v. Dublinski [1955, ONHC] 98
Page One Records v. Britain 98
Legal Architecture 98
Special Situations – Some Discrete Issues in Interlocutory Injunctions 98
Speech 98
Canada Metal Co. v. CBC [1974, ON HC] 98
Canadian Tire v. Desmond 100
Procedural notes about CBC: 100
Medical Treatment 100
Key Differences that Help Courts Make these Decisions: 101
Rasouli 102
Environmental Disputes and Aboriginal Interests 102
MacMillan Bloedel v. Simpson [1996, SCC] 102
Platinex v. Kitchenuhmaykoosib Inninuwug First Nation 103
Constitutional Cases 104
AG MB v. Metropolitan Stores: 104
RJR MacDonald v. Canada 104
Mareva Injunctions 105
The Established Rule 105
Lord Denning to the Rescue – Mareva 106
The Reception in Canada: Aetna 106
Jurisdiction 107
Extraterritorial effect: 107
Protections for ∆ 107
Third parties 107
Anton Piller Orders 108
Red Hot Video 109
109
I. Damages
Basic Process for Assessing Damages:
- Select p interest that deserves vindication
- Restitution
- Idea that people should live up to bargains. A victim of a breached bargain should at least get their money back.
- Restitution is measured by benefit to ∆ à designed to deprive wrongdoer of ill-gotten gains
- Reliance
- Compensates p for expenditures made in reliance on promise by ∆
- Restores status quo prior to promise being made
- Expectation
- Puts p in position they would have been in had the bargain been fulfilled
- ∆ must either keep promise (specific performance) or provide monetary equivalent of keeping promise (damages)
- How do you apply the measure of damages?
- Are there any relevant principles that moderate/limit the damages award, to balance out ∆ legitimate interests?
- Mitigation
- Remoteness
Expectation Damages
General Principles & Lost Profits
Theory and Background (from Fuller & Perdue)
· In some ways, restitution and reliance damages are easy to accept as appropriate remedies in contract law à they are about redressing the balance between p and ∆, and are easy to line up with shared moral values.
o The idea is that people shouldn’t make promises then break them, especially when you know someone will waste time and effort as a result.
· Expectation damages are different: not restoring the harm, but giving p the value of the promise. This is a moral concept, but perhaps one not so commonly shared.
· Expectation damages didn’t originally exist in K law
o They become important in the planning done by individuals through private interactions.
§ To achieve stability in a complex capitalist economy, we need certainty, future planning, credit.
§ It’s about giving planners in the marketplace the security to trade.
o Reliance and restitution don’t sufficiently facilitate these interests.
§ Restitution doesn’t give you anything extra
§ Reliance would require p to prove all the minute ways in which p had relied on ∆ promise, which are just generally included in expectation damages.
· Note: if you include opportunity costs in reliance damages, and went through the whole minute assessment, people could essentially get expectation damages through reliance damages anyway.
· Economic and Juristic Rationales
o Administrative: facilitating reliance
o Economic: allows trading on present value of the K.
Claiming Lost Profits
Canlin Ltd v. Thiokol Fibres Canada [1983, ONCA]
· An example of a court protecting the expectation interest, despite arguments of remoteness and perhaps certainty of damage
· Default: you get the difference b/w goods paid for and goods received; but this is predicated on a duty/ability to mitigate. Where that can’t be done, the presumption is rebutted.
· Facts: p bought product from ∆ to manufacture swimming pool covers. Material defective, shreds into customers’ pools.
· Issue/Arguments:
o ∆ argues, per presumption stated in s. 56(3) of the Sale of Goods Act, that the proper measure of damages should be limited to the difference between actual value and value goods would have had if ≠ defective.
o p claims for lost profits in addition, because their business suffered as a result of the damage to their reputation.
· Held: for p. Entitled to lost profits as well as difference in value.
· Reasons: s. 56(3) of SoG Act doesn’t apply here.
§ An assumption behind the provision: if defect is discovered early enough and buyer acts quickly enough (as obligated to mitigate), then the buyer can find new materials, replace the defective product and move on with their business.