Southcott Estates Inc v Toronto Catholic District School Board | |
---|---|
Hearing: 2012-03-20 Judgment: 2012-10-17 | |
Citations | 2012 SCC 51, [2012] 2 SCR 675 |
Docket No. | 33778 |
Prior history | APPEAL and CROSS‑APPEAL from Southcott Estates Inc. v. Toronto Catholic School Board, 2010 ONCA 310, 104 OR (3d) 784(3 May 2010), setting aside Southcott Estates Inc. v. Toronto Catholic District School Board, 2009 CanLII 3567, 78 R.P.R. (4th) 285(30 January 2009), Superior Court of Justice (Ontario,Canada) |
Ruling | Appeal and cross‑appeal dismissed |
Court membership | |
Chief Justice: Beverley McLachlin Puisne Justices: Louis LeBel, Marie Deschamps, Morris Fish, Rosalie Abella, Marshall Rothstein, Thomas Cromwell, Michael Moldaver, Andromache Karakatsanis | |
Reasons given | |
Majority | Karakatsanis J, joined by LeBel, Deschamps, Abella, Rothstein, and Cromwell JJ |
Dissent | McLachlin CJ |
Fish and Rothstein JJ took no part in the consideration or decision of the case. |
Southcott Estates Inc v Toronto Catholic District School Board, 2012 SCC 51 , [2012] 2 SCR 675, is a landmark case of the Supreme Court of Canada in the area of commercial law, with significant impact in the areas of:
Southcott Estates Inc sued the Toronto Catholic District School Board for specific enforcement of a contract to sell it 4.78 acres (1.93 ha) of land. Southcott Estates Inc was a subsidiary of Ballantry Homes Inc, a developer, [1] and special purpose entity created just for purchasing and developing the land. The deal was conditional upon Southcott paying a 10% deposit, and the Toronto School Board getting severance permission from Toronto's Committee of Adjustment before a certain date. However, the Committee refused without reviewing a development plan for the land, which meant severance was not granted in time. Southcott sued for specific performance or damages.
At trial, Southcott stated it never had any intention to mitigate its loss and had not tried, that it had no assets other than the deposit from Ballantry Inc for the deposit, and it was never going to purchase any other land.
At the Ontario Superior Court of Justice, Spiegel J held that:
He rejected the Board's submission that Southcott had mitigated damages through several purchases subsequent to the breach of the agreement, declaring:
I find that these subsequent purchases were collateral, independent transactions that did not arise out of the consequences of the breach. In all the circumstances, I do not consider these transactions as mitigatory. [5]
The Board appealed to the Ontario Court of Appeal, where Sharpe JA held that:
As a result, nominal damages were awarded in the amount of $1.
Leave to appeal and cross-appeal the decision were granted by the Supreme Court of Canada in November 2011: [9]
In a 6-1 ruling, the appeal was dismissed with costs. As it was therefore unnecessary to consider the cross-appeal, it was dismissed without costs.
Karakatsanis J began by summarizing the principles for mitigation previously adopted by the Court in Asamera Oil Corporation Ltd. v. Sea Oil & General Corporation [10] where Lord Haldane's observation was endorsed:
The fundamental basis is thus compensation for pecuniary loss naturally flowing from the breach; but this first principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps. [11]
The principles have since been refined in further cases at the Court, as well as at the Federal Court of Appeal. [12]
Southcott had argued that, as a single-purpose company, it was impecunious and unable to mitigate without significant capital investment of the parent company or without the corporate mandate to do so. In addition, it would be reasonably foreseeable to those contracting with a single-purpose corporation that such an entity would have finite resources and a confined corporate mandate. [13] This was held to be insufficient:
Asamera, when read together with Semelhago v. Paramadevan, holds that it "cannot be assumed that damages for breach of contract for the purchase and sale of real estate will be an inadequate remedy in all cases," [17] and specific performance will be available only where money cannot compensate fully for the loss, because of some “peculiar and special value” of the land to the plaintiff. [18]
McLachlin CJ believed that the trial judge was correct in finding in fact that the Board had not proved that Southcott had an opportunity to mitigate, which was sufficient to dispose of the appeal. She would have reversed the Court of Appeal's ruling and restored the original verdict. She saw no basis on which to conclude that Southcott acted unreasonably in maintaining its suit for specific performance instead of mitigating its loss: [19]
The decision has raised significant debate on many of the issues it discussed:
At common law, damages are a remedy in the form of a monetary award to be paid to a claimant as compensation for loss or injury. To warrant the award, the claimant must show that a breach of duty has caused foreseeable loss. To be recognised at law, the loss must involve damage to property, or mental or physical injury; pure economic loss is rarely recognised for the award of damages.
Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract. It is typically available in the sale of land law, but otherwise is not generally available if damages are an appropriate alternative. Specific performance is almost never available for contracts of personal service, although performance may also be ensured through the threat of proceedings for contempt of court.
A legal remedy, also referred to as judicial relief or a judicial remedy, is the means with which a court of law, usually in the exercise of civil law jurisdiction, enforces a right, imposes a penalty, or makes another court order to impose its will in order to compensate for the harm of a wrongful act inflicted upon an individual.
Consequential damages, otherwise known as special damages, are damages that can be proven to have occurred because of the failure of one party to meet a contractual obligation, a breach of contract. From a legal standpoint, an enforceable contract is present when it is: expressed by a valid offer and acceptance, has adequate consideration, mutual assent, capacity, and legality. Consequential damages go beyond the contract itself and into the actions that arise from the failure to fulfill. The type of claim giving rise to the damages can affect the rules or calculations associated with a given type of damages, including consequential damages. For example, consequential damages are a potential type of expectation damages which arise in contract law.
The Bankruptcy and Insolvency Act (the Act) is one of the statutes that regulates the law on bankruptcy and insolvency in Canada. It governs bankruptcies, consumer and commercial proposals, and receiverships in Canada.
An adequate remedy or adequate remedy at law is part of a legal remedy which the court deems satisfactory, without recourse to an equitable remedy. This consideration expresses to the court whether money should be awarded or a court order should be decreed.. Adequate remedy at law refers to the sufficient compensation for the loss or damages caused by the defendant with a proper monetary award. The court must grant the adequacy of remedy that will lead to a "meaningful hearing". Whether legal damages or equitable relief are requested depends largely on,whether or not the remedy can be valued. Both two elements, compensation and the meaningfulness of hearing, provide a proper way to have an adequate remedy. The word "meaningfulness" of hearing in the law process is the assumption that the defendant compensated must be meaningful for the injured party where the defendant made a fully covered compensation for all the losses. Hence, the hearing in which cannot give any right amount of compensation award or settlement is not "meaningful", and the unavailability of the compensation will lead to an inadequate remedy. The adequate remedy at law is the legal remedies by meaning it is satisfactory compensation by way of monetary damages without granting equitable remedies.
Loss of chance in English law refers to a particular problem of causation, which arises in tort and contract. The law is invited to assess hypothetical outcomes, either affecting the claimant or a third party, where the defendant's breach of contract or of the duty of care for the purposes of negligence deprived the claimant of the opportunity to obtain a benefit and/or avoid a loss. For these purposes, the remedy of damages is normally intended to compensate for the claimant's loss of expectation. The general rule is that while a loss of chance is compensable when the chance was something promised on a contract it is not generally so in the law of tort, where most cases thus far have been concerned with medical negligence in the public health system.
Expectation damages are damages recoverable from a breach of contract by the non-breaching party. An award of expectation damages protects the injured party's interest in realising the value of the expectancy that was created by the promise of the other party. Thus, the impact of the breach on the promisee is to be effectively "undone" with the award of expectation damages.
Wallace v United Grain Growers Ltd, 1997 CanLII 332, [1997] 3 SCR 701 is a leading decision of the Supreme Court of Canada in the area of Canadian employment law, particularly in determining damages arising from claims concerning wrongful dismissal.
A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties. A contract is legally enforceable when it meets the requirements of applicable law. A contract typically involves the exchange of goods, services, money, or a promise of any of those. In the event of a breach of contract, the injured party may seek judicial remedies such as damages or cancellation.
Daulia Ltd v Four Millbank Nominees Ltd [1977] is an English contract law case, concerning unilateral contracts, and when embarking on the performance of an act for which an offer is open, at what point the offer may be withdrawn. In particular, Goff LJ observed that there would be a duty to not prevent full performance of terms in a unilateral offer, once performance had begun.
Attorney General v Blake[2000] UKHL 45, [2001] 1 AC 268 is a leading English contract law case on damages for breach of contract. It established that in some circumstances, where ordinary remedies are inadequate, restitutionary damages may be awarded.
Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 is an English land law and English contract law case, concerning the measure and availability of damages for breach of negative covenant in circumstances where the court has confirmed a covenant is legally enforceable and refused as it may find, as unconscionable, to issue an order for specific performance or an injunction.
Cinar Corp v Robinson is a leading case of the Supreme Court of Canada in the field of copyright law, which has impact in many key aspects of it, including:
Hryniak v Mauldin, 2014 SCC 7 is a landmark case of the Supreme Court of Canada that supports recent reforms to Canadian civil procedure in the area of granting summary judgment in civil cases.
AI Enterprises Ltd v Bram Enterprises Ltd, 2014 SCC 12 was a unanimous decision of the Supreme Court of Canada that standardized Canadian jurisprudence with respect to the economic tort of unlawful means.
Honda Canada Inc v Keays, 2008 SCC 39, [2008] 2 SCR 362 is a leading case of the Supreme Court of Canada that has had significant impact in Canadian employment law, in that:
Bank of Montreal v Marcotte, 2014 SCC 55 is a ruling of the Supreme Court of Canada. Together with Amex Bank of Canada v. Adams, 2014 SCC 56 and Marcotte v. Fédération des caisses Desjardins du Québec, 2014 SCC 57, it represents a further development in Canadian constitutional jurisprudence on the doctrines of interjurisdictional immunity and paramountcy, together with significant clarifications on the law concerning class actions in the Province of Quebec, which is similar to that in operation in the common law provinces.
Wilson v Alharayeri, 2017 SCC 39 is a leading case of the Supreme Court of Canada which significantly extends the application of the oppression remedy under the Canada Business Corporations Act to include non-corporate parties.
Deloitte & Touche v Livent Inc , 2017 SCC 63 is a leading case of the Supreme Court of Canada concerning the duty of care that auditors have toward their clients during the course of a professional engagement.