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Damages Difficult to Prove

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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