Dasham Carriers Inc. v. Gerlach et al., (2013) 313 O.A.C. 95 (CA)

• Judge: Feldman, MacPherson and Epstein, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: October 01, 2013
• Jurisdiction: Ontario
• Citations: (2013), 313 O.A.C. 95 (CA);2013 ONCA 707

Dasham Carriers Inc. v. Gerlach (2013), 313 O.A.C. 95 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. NO.027

Dasham Carriers Inc. (applicant/respondent) v. David Gerlach (respondent/appellant)

(C56868; M42906; 2013 ONCA 707)

Indexed As: Dasham Carriers Inc. v. Gerlach et al.

Ontario Court of Appeal

Feldman, MacPherson and Epstein, JJ.A.

November 19, 2013.

Summary:

A landlord was ordered to pay a tenant damages of $130,600 flowing from the landlord's improper termination of the tenant's lease of commercial property (see [2012] O.T.C. Uned. 4797). The landlord appealed from the quantum of damages awarded. The landlord also sought a review of an order of Cronk, J.A., in which she struck his affidavit along with all references to it in his factum.

The Ontario Court of Appeal allowed the appeal to correct an error the application judge made in computing the tenant's damages. The court varied paragraph 1 of the judgment to reflect a damage award in the amount of $35,600. The court dismissed the motion to review the order of Cronk, J.A.

Courts - Topic 2105

Jurisdiction - Appellate jurisdiction - Court of Appeal - Civil appeals - [See Courts - Topic 7446 ].

Courts - Topic 7446

Provincial courts - Ontario - Court of Appeal - Jurisdiction - General - A landlord was ordered to pay a tenant damages of $130,600 flowing from the landlord's improper termination of the tenant's commercial lease - The landlord appealed the quantum of damages - The Ontario Court of Appeal allowed the appeal to correct an error the application judge made in computing the tenant's damages, and varied the judgment to reflect a damage award in the amount of $35,600 - The court stated that "I appreciate that the approach I have taken to resolve the application judge's oversight in not deducting the $70,000 in rent owed to the appellant in his calculation of damages was not argued by counsel for the appellant. Normally, I would not determine an appeal on a basis not put forward by counsel as it is counsel's responsibility, not the court's, to advance a party's position. However, as I see it, there is a factor that allows me to proceed as I have. My analysis tracks that of the application judge but for a correction that is necessary in order to bring the final calculation in line with his reasons. ... Subtracting the cost of having access to the leased premises is an essential part of putting the respondent in the position as though the contract had been fulfilled. I am of the view that endorsing the application judge's reasoning to this effect fits precisely within the jurisdiction provided in s. 134(1)(a) of the Courts of Justice Act ... This section gives this court unconditional authority to 'make any order or decision that ought to or could have been made by the court or tribunal appealed from.' ... it is in the interests of justice to apply the correct law and give effect to the application judge's analysis" - See paragraphs 35 to 37.

Damages - Topic 510

Limits of compensatory damages - General - Prohibition against double recovery - [See Damages - Topic 6294 ].

Damages - Topic 5701

Contracts - Breach of contract - Primary rule for breach of contract - [See Damages - Topic 6294 ].

Damages - Topic 5702

Contracts - Breach of contract - Based on loss to the plaintiff - The Ontario Court of Appeal stated that "the focus in any damages calculation is on the injured party's loss and on the measure of compensation required to restore it to the position it would have been in had the contract been performed. Any benefit or detriment to the breaching party is simply not relevant to this determination. This principle is most clearly illustrated by cases involving an 'efficient breach.' In such cases, the defendant's profit from the breach is greater than the measure of damages required to compensate the plaintiff. Even when there is an efficient breach, courts award expectation damage - the amount of the plaintiff's loss. The injured party is not entitled to a higher damage award merely because the breaching party has profited from his repudiation of the contract. To the contrary, the Supreme Court has issued a clear directive that an '[e]fficient breach should not be discouraged by the courts. This lack of disapproval emphasizes that a court will usually award money damages for breach of contract equal to the value of the bargain to the plaintiff'" - See paragraphs 29 to 30.

Damages - Topic 5702

Contracts - Breach of contract - Based on loss to the plaintiff - [See Damages - Topic 6294 ].

Damages - Topic 6294

Contracts - Commercial lease - Breach by lessor - Measure of damages - General - On May 1, 2010, the landlord and the tenant entered into a three-year commercial lease at a rent of $6,500 per month for the first year and $7,000 per month thereafter - The tenant was permitted to sublet - The tenant entered into subleases with Jandu Truck Centre and Best Performance Truck Repairs Inc. for portions of the leased premises - The landlord subsequently entered into a one-year lease with Jandu - That lease commenced on May 1, 2012, one year before the tenant's lease with the landlord and its sublease with Jandu were to expire - On May 6, 2012, the landlord improperly terminated the tenant's lease - At that time, the two subtenants were paying aggregate monthly rent to the tenant of $8,800, $1,800 more than it was paying to the landlord - The landlord was ordered to pay the tenant damages in the amount of $130,600 - The landlord appealed the quantum of damages - The Ontario Court of Appeal varied the tenant's damage award to $35,600 - The application judge correctly held that the tenant's damages arising out of the wrongful termination of the lease was the amount that would restore the tenant to the position it would have been in had the lease agreement been performed - The tenant was entitled to the benefit it would have received over the course of the 12 months left to run under the lease, i.e., the amount of rent it would have received from its two subtenants less the amount of rent it would have owed the landlord for that period - The application judge neglected to subtract the amount the tenant would have owed the landlord for rent ($70,000) during the final year of the lease - That was an obvious oversight - The tenant argued that reducing its damage award by the amount of rent it would have paid the landlord under the lease while allowing the landlord the benefit of the rent the landlord was receiving from Jandu permitted the landlord to "double dip" - The court disagreed - The measure of damages for a breach of contract was expectation damages - The court's calculation of the tenant's damages put the tenant in the position it would have been in had the lease not been breached - Even if the landlord profited from his repudiation of the lease, it did not change the amount of damages to which the tenant was entitled - See paragraphs 17 to 31.

Cases Noticed:

Hamilton v. Open Window Bakery Ltd. et al., [2004] 1 S.C.R. 303; 316 N.R. 265; 184 O.A.C. 209; 2004 SCC 9, refd to. [para. 10].

Agribrands Purina Canada Inc. v. Kasamekas et al. (2011), 278 O.A.C. 363; 106 O.R.(3d) 427; 2011 ONCA 460, supplementary reasons at [2011] O.A.C. Uned. 520; 56 C.C.L.T.(3d) 206; 2011 ONCA 581, refd to. [para. 10].

Haack v. Martin, [1927] S.C.R. 413, refd to. [para. 18].

Burns v. Sohi et al., [2012] O.T.C. Uned. 2414; 21 R.P.R.(5th) 205; 2012 ONSC 2414, refd to. [para. 18].

Upper Room Alliance Group Ltd. v. John Volken Foundation (2008), 54 B.L.R. (4th) 97, supplementary reasons at [2008] O.J. No. 4899 (Sup. Ct.), refd to. [para. 18].

Procopio v. D'Abbondanza (1975), 8 O.R. (2d) 496 (C.A.), refd to. [para. 19].

Bank of America Canada v. Mutual Trust Co. et al., [2002] 2 S.C.R. 601; 287 N.R. 171; 159 O.A.C. 1; 2002 SCC 43, refd to. [para. 29].

Asamera Oil Corp. v. Sea Oil and General Corp. - see Baud Corp., N.V. v. Brook.

Baud Corp., N.V. v. Brook, [1979] 1 S.C.R. 633; 23 N.R. 181; 12 A.R. 271, varied [1979] 1 S.C.R. 677; 25 N.R. 451; 14 A.R. 407, refd to. [para. 29].

Statutes Noticed:

Courts of Justice Act, R.S.O. 1990, c. C-43, sect. 134(1)(a) [para. 36].

Authors and Works Noticed:

Waddams, S.M., The Law of Damages (5th Ed. 2012), p. 9-9 [para. 29].

Counsel:

Sukhjinder Bhangu, for the appellant;

Ajay Duggal and Harinder Dhaliwal, for the respondent.

This appeal was heard on October 1, 2013, before Feldman, MacPherson and Epstein, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Epstein, J.A., and was released on November 19, 2013.