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Damages - Betterment. Kramer v. Ballantyne-Gaska
In Kramer v. Ballantyne-Gaska (Ont CA, 2025) the Ontario Court of Appeal considered the rare issue of 'betterment':(iii) The trial judge made no error in her assessment of betterment
[40] The appellants argue that even if the trial judge did not err in basing damages on the cost to remediate the tank system, the respondents received a “windfall” because, by replacing the tank system, they got a brand new system. According to the appellants, a brand new tank system was better (more valuable) than what the trial judge found the respondents had contracted for – a safe and legally compliant, but not brand new, tank system.
[41] I see no error in the trial judge’s assessment of the issue of betterment. The trial judge noted that the appellants did not lead any evidence on the issue of damages. She found that the appellants had failed to satisfy her “that the expenses incurred and the estimated expenses to replace the fuel tank system would result in a windfall to the plaintiffs.” She referred to Gendron v. Thompson Fuels, 2017 ONSC 4009, at paras. 365-67, aff’d 2019 ONCA 293, leave to appeal refused, [2019] S.C.C.A. No. 228, for the proposition that in some cases, “replacing an old system with a new one does not increase the value of the property.” She held that the onus was on the appellants to prove the value of the alleged improvement (i.e., the increase in value of the Property from the new tank system as compared to if it had a safe and legally compliant but not new tank system).
[42] While I agree with the appellants that betterment was a live issue, the appellants bore the burden to prove the value of the alleged improvement: James Street Hardware and Furniture Co. v. Spizziri (1987), 1987 CanLII 4172 (ON CA), 62 O.R. (2d) 385 (C.A.), at pp. 403-5. I see no error in the trial judge’s finding that, with the appellants not having led any evidence on damages, the evidentiary record was insufficient to establish that the new tank system was more valuable than an older but safe and legally compliant tank system. Just by way of example, there was no evidence of the lifespan of an underground tank system. Had there been such evidence, it may have provided a basis to infer that a new tank system was more valuable than a used but safe and compliant older tank system: James Street Hardware, at p. 405. . Bookman v. U-Haul Co.(Canada) Ltd.
In Bookman v. U-Haul Co.(Canada) Ltd. (Div Ct, 2007) the Divisional Court applied the damages principle of 'betterment' against an otherwise successful plaintiff to reduce an award which overcompensated for them for the loss of used chattels by awarding the value of new ones:[18] Whether it is a reflection of depreciation, the betterment principle or other relevant factors, actual cash value has unusually involved a deduction factor. (See Feist v. Gore Mutual Insurance Co. [1991] O.J. 67)
[19] Where replacement cost is determined to be the proper basis for an award of damages, the usual principle should be applied and depreciation should be taken into account. (See Jens v. Mannix Co. (1979) 30 DLR(4th))
[20] Where the damaged article is repaired, the cost of the repair must be reasonable, both in the work must be necessary and changes must not be extravagant. (See McGregor (supra) at page 1032, 32-003 and 32-006)
[21] Most specifically, the proper measure of damages is the reasonable cost of repair less any enhancement if the repaired article is more valuable than it was before the accident. (See Waddams, The Law of Damages (Toronto: Canada Law Book, 1997) at 1.2760)
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[24] The law however, is clear that depreciation or betterment is a necessary factor to consider in awarding damages.
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[28] It is the Appellant’s position that Deputy Judge erred in law in awarding to the Plaintiffs the price of the rental of the truck as it amounts to unjust enrichment.
[29] Where a breach of contract is found, a Plaintiff is only entitled to be put in the position that he or she would have been in, had the contract not been breached. (See Sally Wertheim v. Chicoutimi Pulp Co. (supra))
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