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Damages - Reliance versus Expectation Contractual Damages. 2505243 Ontario Limited (ByPeterandPaul.com) v. Princes Gates Hotel Limited Partnership
In 2505243 Ontario Limited (ByPeterandPaul.com) v. Princes Gates Hotel Limited Partnership (Ont CA, 2022) the Court of Appeal considered, and endorsed, the trial judge allowing reliance damages rather than expectation damages in a commercial L&T dispute:[30] We disagree. Again, PG accepts that the trial judge did not err by awarding reliance damages, rather than expectation damages.
[31] In PreMD Inc. v. Ogilvy Renault LLP, 2013 ONCA 412, at para. 66, Laskin J.A. said:In some breach of contract cases, an injured person cannot prove expectation damages or loss of profits, or the contract has been unprofitable. In those cases, an injured party may elect to claim reliance damages. In awarding reliance damages, the court recognizes that the injured party has changed its position in reliance on the contract. The court tries to put the injured party in the position it would have been in had it not entered into the contract at all. Thus, reliance damages amount to wasted expenditures – expenses that the injured party incurred in reliance on the contract but would not have incurred had it known that the contract would be or had been breached. [Citations omitted.] [32] The trial judge was cautious in her calculation of 250’s reliance damages. She said:The Court cannot be called upon to speculate when the effects of such unpredictable variables as the pandemic … will force the Court to simply guess at what the future profits of 250 could be. That is not acceptable.
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A more rational and reliable manner of assessing damages is by examining the lost capital which 250 expended in reliance on the performance of its contract. [33] We find no fault in this methodology which led to an award of $7,124,524.92.
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