Certainty and Causation

• Author: Jamie Cassels
• Pages: 363-391

363

CH AP TER 10

CERTAINTY AND

CAUSATION

A. INTRODUCTION: PROOF OF DAM AGES

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

arated. Frequently, problems in substantive law resurface when the

court turns to the quantif‌ication of damages, and occasionally those

problems may be solved through remedial innovation. Nowhere is this

truer than i n the relationship between the substantive law of causa-

tion and principles of damage assessment. This chapter expla ins the

general principles of proof regarding dam ages assessment, ex plains

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

damages quanti f‌ication can resolve otherwi se intractable problems of

proof of caus ation.

1) General Principles

The plaintiff may recover only dam ages that are caused by the defend-

ant’s wrong, and the onus of proof of this causal connection is upon t he

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

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

The civil standard of proof is the balance of probabilities — that it is

“more probable than not” that the defendant’s breach of duty caused the

loss. Typically, proof of causation in this sense is a matter of subst antive

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

REMEDIES: THE L AW OF DAMAGES364

such causal uncerta inty has been lightened somewhat by developments

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

In addition to proving that the defendant c aused the loss, the plain-

tiff must also e stablish the extent or quantum of the loss. This is sue

falls squarely w ithin the law of remedies. In all but the simplest cases

there will be some uncert ainty about this. In contract ca ses, damages

are measured by the economic benef‌it to the plaintiff had the contract

not been breached. This requires pla intiffs to prove not only what they

have directly lost as a result of the breach, but also what benef‌its they

might have obtained, but for the defendant’s wrongdoing. The extent

of the plaintiff ’s loss may partly 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 plaintiff’s entitlement w ill be limited to

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

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

plaintiff’s entitlement involves the construction of hypothetical scen-

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

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

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

In both cases t he plaintiff bear s the onus of proof. For example, in

the case of claim s for lost prof‌it, the plaintiff must bring forward t he

best evidence possible to demonstrate what t hose prof‌its might have

been with a reas onable degree of certaint y. 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 suf fered, the court will not

1 See Satara Farms Inc v Parrish & He imbecker Ltd (2006), 280 Sask R 44 (QB).

2 For example, in Canlin Ltd v Thiokol Fibres Can ada Ltd (1983), 40 OR (2d) 687

(CA), 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 natu re 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.

Similarly, in Eggen Seed Far ms Ltd v Alberta Wheat Pool (1997), 205 AR 77 (QB),

the plainti ff, a pedigreed gra in seed grower, was awarded dam ages for lost yield

for f‌ive years followin g the supply of defective fertili zer. The period for future

losses could be shor ter depending on the natur e of the plaintiff’s bu siness. In

376599 Alberta Inc v Tanshaw Products Inc (2005), 379 AR 1 (QB), economic losses

due to supply of defective enter tainment product were limit ed to six months.

Magnussen Fur niture Inc (cob Magnussen/President ial Furniture) v Mylex Ltd,

2008 ONCA 186 [Magnusse n]: two years lost future prof‌its.

3 Cotter v General Petroleums Lt d, [1951] SCR 154; Canadian Faces In c v Cosmetic

Manufacturing Inc, 2011 ONSC 6171 at para 53. In Pop N’ Juice Inc v 1203891