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At 01 March 2019, after just over one year's medical leave,
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- 12 February 2019

CASE LAW
EXTRACTS

Damages

1. General

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  • Other Exemptions from Income
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    TYPES OF DAMAGE

    2. General Damages
    3. Mental Distress Damages
    4. Damages for Loss of Earning Capacity
    5. Pure Economic Loss
    6. Loss of Chance

    PUNITIVE AND AGGRAVATED DAMAGES

    7. Punitive Damages


    MISCELLANEOUS

    8. Similarity Between Liquidated Damages and Penalty Clauses
    9. Prior Legal Costs as Damages
    10. Effect of Impecunosity on Mitigation
    11. Insurers Denial of Meritorious Claim
    12. Damages Difficult to Prove

    APPEALS

    13. Standard of Review


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    1. General



    'Damages' is an interesting area of law, focussing as it does on the final (and most lucrative ;-) stage of trials. Most of the real 'work' in damages law deals with the logical nitty-gritty of summing things up. Punitive damages, while getting most of the attention, are rarely awarded and not in the high values you might see in US news.


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    TYPES OF DAMAGE
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    2. General Damages



    . Grand Financial Management Inc. v. Solemio Transportation Inc.

    In Grand Financial Management Inc. v. Solemio Transportation Inc. (Ont CA, 2016) the Court of Appeal had to deal with an intriguing award of damages 'at large':

    [82] Damages at large may be awarded in cases of intentional torts, and to corporations in such circumstances where there has been injury to the corporation’s reputation and associated economic loss: see Uni-Jet Industrial Pipe Ltd. v. Canada (A.G.) (2001), 2001 MBCA 40 (CanLII), 198 D.L.R. (4th) 577 (Man. C.A.), at paras. 66-72; Foschia v. Conseil des Écoles Catholique de Langue Française du Centre-Est, 2009 ONCA 499 (CanLII), 266 O.A.C. 17, at para. 37; PSC Industrial Canada Inc. v. Ontario (Ministry of the Environment) (2005), 2004 CanLII 15482 (ON SC), 48 B.L.R. (3d) 58 (Ont. S.C.), at paras. 60-62, rev’d in part on other grounds (2005), 2005 CanLII 27657 (ON CA), 258 D.L.R. (4th) 320 (Ont. C.A.); and Alleslev-Krofchak v. Valcom Ltd., 2009 CanLII 30446 (ON SC), at para. 361, aff’d 2010 ONCA 557 (CanLII), 322 D.L.R. (4th) 193.

    [83] Unlike pecuniary damages, such damages are not capable of being precisely measured and are more a matter of impression: Uni-Jet, at para. 72; and Foschia, at para. 37. As Kroft J.A. explained in Uni-Jet, at para. 72:
    [D]amages at large are a matter of impression; they must include the consideration of a host of circumstances involving both the particular plaintiff and the particular defendant, and they are likely to be unique in each case.


    [84] In Howard v. Madill, 2010 BCSC 525 (CanLII), at para. 89, Bruce J. summarized the principles relating to the assessment of damages at large, as canvassed in Uni-Jet:


    An accurate summary of the law with respect to the assessment of damages at large, and the circumstances in which such an award may be made, is contained in Uni-Jet at paras. 66 to 73. I summarize these principles as follows:


    1. Damages other than for pecuniary loss are "damages at large" and generally include compensation for loss of reputation, injured feelings, bad or good conduct by either party, or punishment.

    2. Damages at large are compensatory for loss that can be foreseen but cannot be readily quantified.

    3. Damages at large are a matter of discretion for the trial judge and are more a "matter of impression and not addition."

    4. Where damages at large are imposed for intentional torts, the assessment of damages provides an opportunity to condemn flagrant abuses of the legal process.


    [85] I too would adopt this summary.

    [86] Damages at large for intentional torts include damages for loss of reputation, but are not limited to that type of loss. As the authorities above demonstrate, they include as well damages reflecting the court’s condemnation of flagrant abuses of the legal process. Generally speaking, they are compensatory for loss that can be foreseen, but not readily quantified. The trial judge applied these factors.

    [87] As a result of Grand Financial’s unlawful conduct, Solemio lost its major client; Arnold Bros., representing 60 per cent of its business, abruptly ended its dealings with Solemio. Solemio’s trucks were literally stopped in their tracks and their loads transferred to other trucks. Solemio lost the business of other customers as well. In addition, its bank account was emptied and frozen, thus creating obvious liquidity problems, including the inability to make payments for trucks, utilities, insurance, salaries, and other bills. These events amply supported the trial judge’s findings that Grand Financial’s conduct contributed to Solemio’s liquidity problems, as well as its loss of reputation, and engaged the court’s concern for abuse of the legal process.

    [88] What of the amount of the damages at large award, then?

    [89] It is not readily apparent how the trial judge arrived at the amount of $175,000, although at one point Mr. Ullah testified that he had received about $200,000 from Arnold Bros. minus an amount of $25,000 that he “left there”, perhaps referring to the same sum of money that Grand Financial later allowed Arnold Bros. to pay to Solemio. As noted above, however, damages at large are “a matter of impression” and are not something that can be precisely measured. It is difficult for an appellate court to say that the assessment is plainly erroneous in such circumstances: see Stephen M. Waddams, The Law of Damages, loose-leaf (2015-Rel. 24), 2nd ed. (Toronto: Canada Law Book, 2015), at para. 13.470. While I may not have arrived at the amount of $175,000, I cannot say that the trial judge erred in principle in doing so. He properly took into account all of the relevant factors in arriving at his conclusion.

    [90] Before leaving this issue, I need to address, briefly, Grand Financial’s wrongful seizure of the $35,000 from Solemio’s RBC account. I am satisfied on the record that Solemio did not claim the seized amount as a separate head of damages.[1] That said, the trial judge’s award of damages at large appears to encompass some recognition of the improper seizure, and Grand Financial itself appears to have accepted the $35,000 as a component of that award, since its argument on appeal was that the damages at large award ought to be set aside or, at least, reduced to that amount. As well, one of the three foundations upon which the trial judge based his award of damages at large was that Grand Financial’s actions had constituted a serious abuse of the legal process, a reference to the unlawful resort to the PPSA Security. I conclude, on these bases, that the award of damages at large was intended to incorporate the factors that would give rise to the recovery of the $35,000 amount, and I see no error in that approach.

    [91] On that basis, I would not interfere with the trial judge’s award of damages at large.


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    3. Mental Distress Damages



    . Fernandes v. Penncorp Life Insurance Company

    In Fernandes v. Penncorp Life Insurance Company (Ont CA, 2014), on the issue of mental distress damages, the court stated:
    [88] In Fidler, at paras. 51-53, the Supreme Court observed that the jurisprudence speaks of two different types of aggravated damages. The court clarified that the term “aggravated damages” is misplaced in a case of mental distress damages arising out of a contractual breach. This was the nature of the damages claimed and awarded in the case under appeal.

    [89] In Fidler, the Supreme Court held that damages for mental distress for breach of contract may be awarded “where they are established on the evidence and shown to have been within the reasonable contemplation of the parties at the time the contract was made”: para. 45.

    [90] This does not obviate the need to prove the loss. The court stated at para. 47:
    The court must be satisfied: (1) that an object of the contract was to secure a psychological benefit that brings mental distress upon breach within the reasonable contemplation of the parties; and (2) that the degree of mental suffering caused by the breach was of a degree sufficient to warrant compensation.


    [91] In that case, the Supreme Court determined that the plaintiff’s distress and discomfort arising out of the loss of disability coverage was amply supported by the evidence, which included extensive medical evidence. The court did not disturb the award of $20,000.



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    4. Damages for Loss of Earnings Capacity



    . Boucher v Wal-Mart Canada Corp.

    In Boucher v Wal-Mart Canada Corp. (Ont CA, 2014), the court suggests that, on the right facts, a claim for loss of earning capacity is conceivable in a wrongful dismissal context:
    [102] .... In Canada, as the trial judge said in her ruling, an award for future loss of income compensates a plaintiff for loss of earning capacity – in other words, the loss of an asset, the capacity to earn: see M.B. v. British Columbia, 2003 SCC 53 (CanLII), [2003] 2 S.C.R. 477; Lazare v. Harvey, 2008 ONCA 171 (CanLII). Typically, in personal injury actions, plaintiffs have justifiable future loss of income claims because the accident has impaired their capacity to earn income.

    [103] A claim for future loss of income can arise in an employment context where a plaintiff has not recovered from the effects of the wrongdoer’s action and the plaintiff has thus suffered a loss of any earning capacity because of the wrongdoer’s tortious conduct: see, for example, Piresferreira.


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    5. Pure Economic Loss



    . Mandeville v. The Manufacturers Life Insurance Company

    In Mandeville v. The Manufacturers Life Insurance Company (Ont CA, 2014) the Court of Appeal expounded on the nature of damages for "pure economic loss":
    [146] Pure economic loss is loss suffered by an individual that is not accompanied by physical injury or property damage: Martel Building Ltd. v. Canada, 2000 SCC 60 (CanLII), 2000 SCC 60, [2000] 2 S.C.R. 860, at para. 34; D’Amato v. Badger, 1996 CanLII 166 (SCC), [1996] 2 S.C.R. 1071, at para. 13; and Design Services Ltd. v. Canada, 2008 SCC 22 (CanLII), 2008 SCC 22, 1 S.C.R. 737, at para. 30.

    [147] In the present case, the appellants are claiming damages equivalent to the benefits the class members would have received had they been treated as eligible policyholders upon Manulife’s demutualization. The damages sought are “not causally connected to physical injury to their persons or physical damage to their property”: Design Services, at para. 30. The injury or damage complained of consists of alleged harm to the class members’ economic interests, rather than any physical harm or damage to their person or property. As such, the claim is seeking recovery for pure economic loss.

    [148] What difference does it make to this action that the appellants’ claim is for pure economic loss? The Supreme Court answered these questions in Martel, at para. 35, saying that such claims require greater scrutiny when the court is deciding whether to recognize a duty of care:
    As a cause of action, claims concerning the recovery of pure economic loss are identical to any other claim in negligence in that the plaintiff must establish a duty, a breach, damage and causation. Nevertheless, as a result of the common law’s historical treatment of economic loss, the threshold question of whether to recognize a duty of care receives added scrutiny relative to other claims in negligence. [Emphasis added.]
    [149] At para. 37 of Martel, the Court set out the policy reasons underlying the common law’s traditional reluctance to permit recovery for pure economic loss:
    First, economic interests are viewed as less compelling of protection than bodily security or proprietary interests. Second, an unbridled recognition of economic loss raises the spectre of indeterminate liability. Third, economic losses often arise in a commercial context, where they are often an inherent business risk best guarded against by the party on whom they fall through such means as insurance. Finally, allowing the recovery of economic loss through tort has been seen to encourage a multiplicity of inappropriate lawsuits.
    [150] Nonetheless, the Canadian jurisprudence shows that there is no automatic bar to recovery for pure economic loss. Over time, recovery for pure economic loss has been permitted in five categories of negligence claims:
    1. the independent liability of statutory public authorities;

    2. negligent misrepresentation;

    3. negligent performance of a service;

    4. negligent supply of shoddy goods or structures; and

    5. relational economic loss.

    See Canadian National Railway Co. v. Norsk Pacific Steamship Co., 1992 CanLII 105 (SCC), [1992] 1 S.C.R. 1021, at p. 1049; and Martel, at para. 38.


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    6. Loss of Chance



    . Berry v Pulley

    In Berry v. Pulley (Ont CA, 2015) the court outlined the approach to be taken when assessing damages for 'loss of chance':

    The loss of chance doctrine

    [70] A two-step framework applies when a plaintiff alleges injury consisting of the loss of the chance to achieve a benefit or avoid a loss. Folland v. Reardon (2005), 2005 CanLII 1403 (ON CA), 74 O.R. (3d) 688 (C.A.), at para. 73, outlines the four criteria the plaintiff must meet at the first step:
    First, the plaintiff must establish on the balance of probabilities that but for the defendant’s wrongful conduct, the plaintiff had a chance to obtain a benefit or avoid a loss. Second, the plaintiff must show that the chance lost was sufficiently real and significant to rise above mere speculation. Third, the plaintiff must demonstrate that the outcome, that is, whether the plaintiff would have avoided the loss or made the gain, depended on someone or something other than the plaintiff himself or herself. Fourth, the plaintiff must show that the lost chance had some practical value. [Citations omitted.]
    [71] As Doherty J.A. noted in Folland, at para. 74, the second criterion is “somewhat nebulous. There is no bright line between a real chance and a speculative chance. An empirical review of the case law suggests that chances assessed at less than 15 percent are seldom viewed as real chances.” This de minimis threshold has also been described as requiring the plaintiff to prove she had “some reasonable probability” of realizing “an advantage of some real substantial monetary value”: Kinkel v. Hyman, 1939 CanLII 7 (SCC), [1939] S.C.R. 364, at p. 383; see also Eastwalsh Homes Ltd. v. Anatal Developments Ltd. (1993), 1993 CanLII 3431 (ON CA), 12 O.R. (3d) 675 (C.A.), at pp. 689-90, leave to appeal refused, [1993] S.C.C.A. No. 225.

    [72] If these four criteria are met, the court proceeds to the second step and will award damages equal to the probability of securing the lost benefit (or avoiding the loss) multiplied by the value of the lost benefit (or the loss sustained): see Wong v. 407527 Ontario Ltd. (1999), 1999 CanLII 3788 (ON CA), 179 D.L.R. (4th) 38 (Ont. C.A.), at para. 27.
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    PUNITIVE AND AGGRAVATED DAMAGES
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    7. Punitive Damages



    . Fernandes v. Penncorp Life Insurance Company

    In Fernandes v. Penncorp Life Insurance Company (Ont CA, 2014) the Court of Appeal commented as follows on several issues relating to the awarding of punitive, aggravated and mental distress damages - and their appellate review - in the context of an appeal of a plaintiff's successful lawsuit for private disability insurance coverage. On the issue of punitive damages, and bad faith dealings by an insurer, the court stated:


    [74] The law relating to punitive damages was canvassed in detail by the Supreme Court in Whiten and addressed again more recently in Fidler. The key applicable principles may be summarized as follows.
    • Punitive damages are designed to address the objectives of retribution, deterrence and denunciation, not to compensate the plaintiff: Whiten, at paras. 43 and 94, and Fidler, at para 61.

    • They are awarded only where compensatory damages are insufficient to accomplish these objectives: Whiten, at para. 94.

    • They are the exception rather than the rule: Whiten, at para. 94.

    • The impugned conduct must depart markedly from ordinary standards of decency; it is conduct that is malicious, oppressive or high-handed and that offends the court’s sense of decency: Whiten, at paras. 36 and 94; and Fidler, at para. 62.[4]

    • In addition to the breach of contract, there must be an independent actionable wrong: Whiten, at para. 78, and Fidler, at para. 63.

    • In a case of breach of an insurance contract for failure to pay insurance benefits, a breach by the insurer of its contractual duty to act in good faith will constitute an independent actionable wrong: Whiten, at para. 79, and Fidler, at para. 63.


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    . Boucher v Wal-Mart Canada Corp.

    In Boucher v Wal-Mart Canada Corp. (Ont CA, 2014), a wrongful dismissal case the Court of Appeal engaged in an extended and informative discussion of the principles applicable to awards of aggravated and punitive damages, and how they interact [see paras 65-94], particularly the point that in a contract case an independently actionable tort is required before punitive damages can be awarded:
    (a) Independent Actionable Wrong

    [79] To obtain an award of punitive damages, a plaintiff must meet two basic requirements. First, the plaintiff must show that the defendant’s conduct is reprehensible: in the words of Binnie J. in Whiten, “malicious, oppressive and high-handed” and “a marked departure from ordinary standards of decent behaviour”: see Whiten, at para. 36. Second, the plaintiff must show that a punitive damages award, when added to any compensatory award, is rationally required to punish the defendant and to meet the objectives of retribution, deterrence and denunciation.

    [80] When the claim against the defendant is for breach of contract, as is Boucher’s claim against Wal-Mart, the plaintiff must meet a third requirement. The plaintiff must show that the defendant committed an actionable wrong independent of the underlying claim for damages for breach of contract. In Canada, this requirement originated in the Supreme Court of Canada’s judgment in Vorvis, itself a case about a breach of an employment contract, and was later affirmed in Whiten, at paras. 78-83.

    ....

    (c) Rationally Required

    [87] The jury found Wal-Mart liable for aggravated damages of $200,000. In addition, Wal-Mart is vicariously liable for the $100,000 tort award against Pinnock. And Wal-Mart is liable for damages for constructive dismissal and for $140,000 in trial costs. In the light of these compensatory awards, Wal-Mart submits that an additional punitive damages award of $1,000,000 is not rationally required to punish it or to give effect to denunciation and deterrence. I accept Wal-Mart’s submission.

    [88] The very high aggravated damages award by itself sends a significant denunciatory and punitive message and likely will have a deterrent effect. Additionally, although the jury was justified in finding Wal-Mart’s misconduct sufficiently reprehensible to warrant an award of punitive damages, its misconduct falls far short of the gravity and duration of the misconduct in other cases that have attracted high punitive damages awards. These cases were extensively reviewed by my colleagues Lauwers J.A. in dissent and Cronk J.A. for the majority in Pate Estate v. Galway-Cavendish and Harvey (Township), 2013 ONCA 669 (CanLII), 312 O.A.C. 244. Two of these cases will illustrate the differences: Whiten and Pate Estate itself.

    [89] In Whiten, the Supreme Court of Canada upheld the jury’s award of $1,000,000 in punitive damages. In that case, however, Pilot, the insurer, refused to pay a fire loss claim. Instead:
    Pilot acted maliciously and vindictively by maintaining a serious accusation of arson for two years in the face of the opinions of an adjuster and several experts it had retained that the fire was accidental. It abused the obvious power imbalance in its relationship with its insured by refusing to pay a claim that it knew or surely should have known was valid, and even by cutting off rental payments on the Whiten’s rented cottage. It took advantage of its dominant financial position to try to force the Whitens to compromise or even abandon their claim. Indeed, throughout the nearly two years that the claim was outstanding, Pilot entirely disregarded the Whitens’ rights.
    See Whiten, at para. 137. In addition to the punitive damages, the plaintiffs in Whiten received substantial costs and their out-of-pocket losses from the fire, but no aggravated damages or compensatory tort damages.

    [90] In Pate Estate, the municipality wrongfully dismissed Mr. Pate, its senior building inspector. It alleged that he had engaged in wrongdoing, and instigated an Ontario Provincial Police investigation, which led to criminal charges and a four-day trial at which Pate was acquitted. As Lauwers J.A. noted at para. 9 of his reasons:
    The local media reported extensively on the criminal proceedings and Mr. Pate remained in the public spotlight from March 26, 1999, when he was wrongfully dismissed, until his acquittal on December 17, 2002. Mr. Pate did not obtain employment in the municipal field again and passed away in January 2011.
    [91] Pate sued the municipality for damages and at a second trial, the trial judge awarded $550,000 in punitive damages in addition to the award of aggravated damages of $75,000 made at the first trial. The majority of this court reduced the punitive damages award to $450,000. In dissent, Lauwers J.A. would have upheld the award of $550,000.

    [92] Here, by contrast, Wal-Mart is already liable for significant compensatory damages. Its misconduct lasted less than six months. It did not profit from its wrong. And while it obviously maintained a power imbalance over Boucher, it did not set out to force her resignation. In the light of these considerations, a punitive damages award of $100,000 on top of the compensatory damages it must pay is all that is rationally needed to punish Wal-Mart and denounce and deter its conduct. Accordingly, I would allow Wal-Mart’s appeal on punitive damages and reduce the award from $1,000,000 to $100,000.


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    . Grand Financial Management Inc. v. Solemio Transportation Inc.

    In Grand Financial Management Inc. v. Solemio Transportation Inc. (Ont CA, 2016) the Court of Appeal had this to say with respect to punitive damages:

    Punitive Damages

    [101] Even though he found that Solemio had made out the tort of intentional interference with economic relations, the trial judge declined to grant Solemio’s request for punitive damages in the amount of $250,000. I see no error in this determination.

    [102] The trial judge properly summarized the law relating to punitive damages at para. 88 of his reasons:


    Punitive damages are only awarded in extraordinary situations. In general, punitive damages are considered in situations where the defendant’s misconduct is so malicious, oppressive, and high-handed that it would offend the court’s sense of decency. Punitive damages do not bear any relation to what the plaintiff should receive by way of compensation. Their aim is not to compensate a party, but rather to punish someone. It is the means by which a court expresses its outrage at what it considers egregious conduct of a party. As noted by the Supreme Court of Canada in Whiten v. Pilot Insurance Co., 2002 SCC 18 (CanLII), [2002] 1 S.C.R. 595, punitive damages are very much the exception rather than the rule. [Citations omitted.]


    [103] His application of the law on punitive damages to the circumstances of this case was a matter of fact and mixed fact and law, and is therefore entitled to deference.

    [104] The trial judge concluded on the evidence that, even though Grand Financial had acted in an unlawful manner, its conduct did not rise to a level warranting an award of punitive damages. In doing so, he took into account, at para. 89, the fact “that Solemio [had run] up a very substantial debt in connection with the Wild Lions’ invoices”, while at the same time it was receiving prompt payment from Arnold Bros. for the Solemio counterpart of those invoices. He noted in addition that one component of the award of damages at large was a reflection of the court’s disapproval of Grand Financial’s abuse of the legal process. The punitive damages concept of expressing society’s disapproval of the defendant’s behaviour had accordingly already been taken into account.

    [105] He was entitled to make this call on the evidence, in my view.



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    MISCELLANEOUS
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    8. Similarity Between Liquidated Damages and Penalty Clauses



    . Ottawa Community Housing Corporation v. Foustanellas (Argos Carpets)

    In Ottawa Community Housing Corporation v. Foustanellas (Argos Carpets) (Ont CA, 2015) the Court of Appeal commented on the issue of whether some contractual clauses were both penalty clauses and reflected liquidated damages:

    [32] In my opinion, the trial judge correctly held that clause 1.6.3 is neither a penalty nor a liquidated damages clause as those clauses are recognized under the established case law.

    [33] The authorities relied on by the appellants themselves compel this interpretive conclusion. For example, in Canadian General Electric Co. v. Canadian Rubber Co. (1915), 1915 CanLII 45 (SCC), 52 S.C.R. 349, cited by the appellants, Sir Charles Fitzpatrick C.J. noted, at p. 351: “A penalty is the payment of a stipulated sum on breach of the contract, irrespective of the damage sustained. The essence of liquidated damages is a genuine covenanted pre-estimate of damage.” In Elsley v. J.G. Collins Insurance Agencies Ltd., 1978 CanLII 7 (SCC), [1978] 2 S.C.R. 916, Dickson J. (as he then was), writing for a unanimous Supreme Court, explained that, where liquidated damages are stipulated in a contract, the injured party may elect to take the sum stipulated without regard to his or her actual loss. Where, however, the stipulated sum is properly to be seen as a penalty, the injured party may only recover proven damages and the amount recoverable may not exceed the sum stipulated: at p. 938.

    [34] Under these authorities, the critical common element is that both penalty and liquidated damages clauses specify a stipulated sum agreed on by the parties at the time of contract formation.

    [35] Clause 1.6.3 of the Carpet Contract makes no mention of a stipulated or agreed sum recoverable on breach, whether as a penalty or otherwise. In other words, it does not stipulate a sum, whether as the amount payable on breach or as the maximum amount recoverable upon proof of actual damage arising from a contractual breach. Instead, the clause contemplates that, on breach of the Carpet Contract by the contractor, the owner’s damages and losses require assessment and the owner may cease payments to the contractor pending quantification of those damages and losses. As the trial judge aptly observed, at para. 69 of his reasons, the amount of the owner’s losses and damages “on jobs completed under the contract at any given time could vary widely”. Further, the fact that the amount of outstanding invoices owed to the contractor may eventually be set off against the quantified amount of the owner’s losses and damages does not convert clause 1.6.3 into a penalty or liquidated damages provision.


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    9. Prior Legal Costs as Damages



    . Salasel v Cuthbertson

    In Salasel v Cuthbertson (Ont CA, 2015) the Court of Appeal considered whether a plaintiff was precluded from claiming actual legal costs of a prior proceeding (to the extent that the earlier court had not awarded them) as damages in a subsequent proceeding. The lower court held that the earlier court's cost award set up an issue estoppel against such a claim:
    [22] .... I see no error in the conclusion of the motion judge that issue estoppel applied to bar the appellants’ claim in this action for the recovery of “extra costs” incurred in the Prior Proceedings or in his dismissal of the appellants’ claim for their “extra costs” as special damages under Rule 21.01(3)(d) because it was frivolous, vexatious or otherwise an abuse of the process of the court.




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    10. Effect of Impecunosity on Mitigation



    . Carson v. Kearney (Town)

    In Carson v. Kearney (Town) (Ont CA, 2016) is useful authority for the proposition that impecuniosity can act as a limiting factor on a party's duty to mitigate damages:
    [10] The duty to mitigate required that the respondents take reasonable steps to mitigate their damages. The duty to mitigate, however, does not require the injured party to spend money that it does not have, especially when it is the conduct of the tortfeasor that has left the injured party without funds. We would not interfere with the damages award.



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    11. Insurers Denial of Meritorious Claim



    . Fernandes v. Penncorp Life Insurance Company

    In Fernandes v. Penncorp Life Insurance Company (Ont CA, 2014) the Court of Appeal commented on when damages may emanate from an insurer's denial of a meritorious claim:


    [75] In considering the issue of good faith, it must be emphasized that disputing or refusing a meritorious claim does not, in itself, constitute a breach of a duty to act in good faith: Fidler, at para. 63.

    [76] The decision of 702535 Ontario Inc. v. Lloyd’s of London, Non-Marine Underwriters 2000 CanLII 5684 (ON CA), (2000), 184 D.L.R. (4th) 687 (Ont. C.A.), which was approved by the Supreme Court in Fidler, describes the parameters of an insurer’s duty at para. 29:
    The duty of good faith also requires an insurer to deal with its insured’s claim fairly. The duty to act fairly applies both to the manner in which the insurer investigates and assesses the claim and to the decision whether or not to pay the claim. In making a decision whether to refuse payment of a claim from its insured, an insurer must assess the merits of the claim in a balanced and reasonable manner. It must not deny coverage or delay payment in order to take advantage of the insured’s economic vulnerability or to gain bargaining leverage in negotiating a settlement. A decision by an insurer to refuse payment should be based on a reasonable interpretation of its obligations under the policy. This duty of fairness, however, does not require that an insurer necessarily be correct in making a decision to dispute its obligations to pay a claim. Mere denial of a claim that ultimately succeeds is not, in itself, an act of bad faith.



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    12. Damages Difficult to Prove



    . TMS Lighting Ltd. v. KJS Transport Inc.

    In TMS Lighting Ltd. v. KJS Transport Inc. (Ont CA, 2014) the Court of Appeal considered the doctrine applicable to the quantification of damages where they were inherently difficult to prove:

    [61] It is also beyond controversy that a plaintiff bears the onus of proving his or her claimed loss and the quantum of associated damages on a reasonable preponderance of credible evidence. Further, as the trial judge recognized in this case, a trial judge is obliged to do his or her best to assess the damages suffered by a plaintiff on the available evidence even where difficulties in the quantification of damages render a precise mathematical calculation of a plaintiff’s loss uncertain or impossible. Mathematical exactitude in the calculation of damages is neither necessary nor realistic in many cases. The controlling principles were clearly expressed by Finlayson J.A. of this court in Martin v. Goldfarb, 1998 CanLII 4150 (ON CA), [1998] O.J. No. 3403, 112 O.A.C. 138, at para. 75, leave to appeal to S.C.C. refused, [1998] S.C.C.A. No. 516:

    I have concluded that it is a well established principle that where damages in a particular case are by their inherent nature difficult to assess, the court must do the best it can in the circumstances. That is not to say, however, that a litigant is relieved of his or her duty to prove the facts upon which the damages are estimated. The distinction drawn in the various authorities, as I see it, is that where the assessment is difficult because of the nature of the damage proved, the difficulty of assessment is no ground for refusing substantial damages even to the point of resorting to guess work. However, where the absence of evidence makes it impossible to assess damages, the litigant is entitled to nominal damages at best.


    See also Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC), [1999] 1 S.C.R. 142, at para. 99; 100 Main Street East Ltd. v. W.B. Construction Ltd. 1978 CanLII 1630 (ON CA), (1978), 20 O.R. (2d) 401 (C.A.), 88 D.L.R. (3d) 1, at para. 80; Penvidic Contracting Co. v. International Nickel Co. of Canada, 1975 CanLII 6 (SCC), [1976] 1 S.C.R. 267, at pp. 278-79.

    [62] Thus, the respondents bore the onus of establishing their lost productivity damages, which they characterized in their pleading as “special damages”. Whether damages of this type are properly to be termed “special damages” (a label that I regard as inappropriate), or simply as a type of general damages to be measured in accordance with the trial evidence, the plaintiff bears the onus of proof on a balance of probabilities.

    [63] On this appeal hearing, the respondents do not fault the trial judge for rejecting their theory of the appropriate method for the calculation of lost productivity damages in nuisance. Rightly so. There was no evidence at trial to support the respondents’ proposed use of a range of two to seven percent of gross sales revenues to measure these damages. As a result, consistent with his obligations under Goldfarb and related cases, the trial judge was obliged to examine whether the evidentiary record afforded a reasonable and reliable alternative basis for the quantification of these damages.

    [64] The quantification of damages occasioned by a proven loss is often a difficult task. In many cases, while loss is established, the evidence affords little support for a precise or reliable assessment of damages arising from the loss. For this reason, as Finlayson J.A. noted in Goldfarb, at para. 75, a trial judge confronted with a meagre evidentiary record on damages may be required to resort to educated “guess work”.

    [65] That said, in my opinion, it is not open to a trial judge to postulate a method for the quantification of damages that is not supported by the evidence at trial. Nor is it open to a trial judge to employ an approach to the quantification of damages that the parties did not advance and had no opportunity to test or challenge at trial. See for example, Stemeroff v. Swartz, 2005 CanLII 18183 (ON CA), [2005] O.J. No. 2073, 198 O.A.C. 141 (C.A.); and, in the context of liability, Rodaro v. Royal Bank of Canada, 2002 CanLII 41834 (ON CA), [2002] O.J. No. 1365, 59 O.R. (3d) 74 (C.A.). To hold otherwise would sanction trial unfairness.



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    APPEALS
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    13. Standard of Review



    . Fernandes v. Penncorp Life Insurance Company

    In Fernandes v. Penncorp Life Insurance Company (Ont CA, 2014) the Court of Appeal stated as follows on the standard of appellate review:
    [97] The applicable principles for appellate review of damage awards are described by Viscount Simon in Nance v. British Columbia Electric R. Co., [1951] 3 D.L.R. 705, at p. 713:
    The principles which apply under this head are not in doubt. Whether the assessment of damages be by a Judge or a jury, the Appellate Court is not justified in substituting a figure of its own for that awarded below simply because it would have awarded a different figure if it had tried the case at first instance. Even if the tribunal of first instance was a Judge sitting alone, then, before the Appellate Court can properly intervene, it must be satisfied either that the Judge, in assessing the damages, applied a wrong principle of law (as by taking into account some irrelevant factor or leaving out of account some relevant one); or, short of this, that the amount awarded is either so inordinately low or so inordinately high that it must be a wholly erroneous estimate of the damage [citations omitted].
    [98] This decision has been repeatedly affirmed by this court. See for example, Barrick Gold Corporation v. Lopehandia 2004 CanLII 12938 (ON CA), (2004), 71 O.R. (3d) 416.


    ---------------- standard of review

    . Hansen v. Williams

    In this personal injury jury case, Hansen v. Williams (Ont CA, 2014, the Court commented as follows on it's role in the review of the quantum of jury awards for non-pecuniary damages ('pain and suffering'):

    [12] An appellate court is not to interfere with a jury’s damage award unless the award is so plainly unreasonable and unjust as to satisfy the court that no jury reviewing the evidence as a whole and acting judicially could have reached it: McLean v. McCannell, 1937 CanLII 1 (SCC), [1937] S.C.R. 341, at p. 343; Housen v. Nikolaisen, 2002 SCC 33 (CanLII), 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 30. This is a very high threshold. Appellate courts are not entitled to substitute their own awards in place of jury awards simply because they would have arrived at a different amount: Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130, at para. 158.



    ------------------ standard of review

    . TMS Lighting Ltd. v. KJS Transport Inc.

    In TMS Lighting Ltd. v. KJS Transport Inc. (Ont CA, 2014) the court commented on the appellate standard of review for damages quantum:

    [60] At the outset, I acknowledge that a trial judge’s assessment of damages attracts considerable deference from a reviewing court. Appellate interference with a damages award at trial, particularly an award made by a trial judge sitting alone, is justified only where the trial judge made an error in principle, misapprehended the evidence, failed to consider relevant factors, considered irrelevant factors, made an award without any evidentiary foundation, or otherwise made a wholly erroneous assessment of damages: Kerr v. Baranow, 2011 SCC 10 (CanLII), 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 158; Magnussen Furniture Inc. (c.o.b. Magnussen/Presidential Furniture) v. Mylex Ltd., 2008 ONCA 186 (CanLII), 2008 ONCA 186, 89 O.R. (3d) 401, at para. 71; Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58 (CanLII), 2001 SCC 58, [2001] 2 S.C.R. 943, at para. 80.


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    Sources

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