Certainty and Causation

• Author: Jamie Cassels/Elizabeth Adjin-Tettey
• Profession: Professor of Law, Vice President Academic, and Provost, University of Victoria/Professor of Law, University of Victoria
• Pages: 319-344

CHA PTER 10

CERTAINTY AND

CAUSATION

A. INTRODUCTION: PROOF OF DAMAGES

The law of remedies and the substantive law are not always easily sep-

arated. Frequently, problems i n substantive law re surface when the

court turns to the quantif‌ication of damages, a nd occasionally those

problems may be solved through remedial innovation. Nowhere is

this more tr ue than in the relationship between the substantive law of

causation and pr inciples of dam age asses sment. This ch apter explain s

the general principles of proof regarding damages asse ssment, explains

recovery for “lost chances,” and shows how an imaginative approach to

damages quantif‌ication can resolve other wise intractable problems of

proof of causation.

1) General Principles

The plaintiff may recover only damages th at are caused by t he defend-

ant’s wrong, and the onus of proof of this causal connection is upon the

plaintiff. The test for proving causation i s the “but for” test — that the

loss would not have occurred but for the defendant’s breach of duty. The

civil stand ard of proof is the ba lance of probabilities — that it is “more

probable than not” that the defendant’s breach of duty c aused the loss.

Typically, proof of causation in this sense is a matter of substantive law.

However, as will become apparent, the burden upon litigants facing

319

REMEDIES: THE L AW OF DAMAGES320

such causal uncertainty has been lightened somewhat by developments

in the law of remedies, especially through recovery for lost chance s.

In addition to proving that the defendant caused the loss, the plain-

tiff must also establish the exte nt or quantum of the loss. This issue

falls squ arely within the l aw of remedies. In all but the simplest cases

there wi ll be some uncert ainty about this. In contract cases, damages

are measured by the economic benef‌it to the plainti ff had the contract

not been breached. This requires plaint iffs to prove not only what they

have directly lost as a result of the breach, but al so what benef‌it s they

might h ave obtai ned, but for t he defendant’s wrongdoing. The extent

of the plaintiff’s loss m ay pa rtly depend on the nature of the breach,

as well as the nature of the defendant’s operations or purpose of the

contract. In some cases the plainti ff’s entitlement w ill be li mited to

the immediate consequences of the breach,1 whereas in other cases,

the breach may have a ripple effect for future years.2 Deter mining the

plaintiff ’s entitlement involves the construction of hy pothetical scen-

arios about what would have happened but for the breach. The same

is true in tort cases. Damages are assessed by determining what the

plaintiff ’s situation would have been, but for the tort.

In both case s the plaintif f bears t he onus of proof. For example, in

the ca se of claims for lost prof‌it, the plainti ff must bring forward the

best evidence possible to demonstrate what those prof‌its might have

been with a reasonable degree of certainty. Such evidence will be based

on the plaintiff’s own business records, evidence from competitors, and

expert opinions. In the absence of evidence of some loss, the court may

hold the burden of proof against the plaintiff and award nothing.3 Even

where the evidence shows that a loss was suffered, the court will not

1 See Satara Farms Inc. v. Parrish & Heim becker Ltd. (2006), 280 Sask. R. 44 (Q.B.).

2 For example, in Canlin Ltd. v. Thiokol Fibres Canada Ltd. (1983), 40 O.R. (2d) 687

(C.A.), involving the supply of defective pool cover m aterials, the plai ntiff’s losses

were not conf‌ined to los ses on the sale of pool covers manu factured with the de-

fective materi als, but also covered lost prof‌its for four ye ars because the nat ure of

the breach was s uch that it affected the plai ntiff’s reputation in t he industry and it

was not reali stic for the plaintiff to h ave re-entered the market imme diately. Simi-

larly, in Eggen Seed Farms Ltd . v. Alberta Whea t Pool (1997), 205 A.R. 77 (Q.B.),

the plainti ff, a pedigreed gra in seed grower, was awarded da mages for lost yield

for f‌ive years followi ng the supply of defective fertili zer. The period for future

losses could be shor ter depending on the natur e of the plaintiff ’s business (376599

Alberta Inc. v. Tanshaw Products Inc. (2005), 379 A.R. 1 (Q.B): economic losse s due

to supply of defective enter tainment product limite d to six months).

3 Cotter v. General Petroleums Ltd ., [1951] S.C.R. 154. In Pop N’ Juice Inc. v. 1203891

Ontario Ltd ., [20 04] O.J. No. 3085 (S.C.J.), claim for consequent ial losses for con-

version was di smissed for failure to prove t he losses on a balance of probabil ities.