Equitable Damages

• Author: Jeffrey Berryman
• Pages: 449-475

449

CHAPTER 17

EQUITABLE DAMAGES

A. INTRODUCTION

In this chapter we explore the extent to which chancery courts can

award equitable damages. Historically, chancery always exercised a

jurisdiction to award monetary awards, either as equitable compen-

sation1 or as an account of prof‌its. However, the jurisdiction to grant

damages was doubtful. By 1858 it was felt necessar y in England to pass

the Chancery Amendment Act,2 better known as Lord Cairns’ Act, so as

to empower chancery courts with jurisdiction to award damages in

claims for injunctions and specif‌ic performance.3 Although the legisla-

tion was subsequently repealed it s sentiments have been retained, prin-

cipally in legislation that describes the composition, procedure, and

jurisdiction of superior courts. In Ontario, section 99 of the Courts of

Justice Act4reads as follows:

1 See Chapter 18.

2 An Act to amend the Cour se of Procedure in the High Court of Chancery, the Court

of Chancery in Ireland , and the Court of Chancery of the Cou nty Palatine of Lan-

ca ste r, 1858 (U.K.), 21 & 22 Vict., c. 27.

3 For an excellent histor y of the development of this juri sdiction, see P. McDer-

mott, Equitable Damages (Sydney: Butt erworths, 1994).

4 R.S.O. 1990, c. C.43.

THE LAW OF EQUITABLE REMEDIES450

A court that has jurisdiction to grant an injunction or order specif‌ic

performance may award damages in addition to, or in substitution

for, the injunction or specif‌ic perform ance.

Similar provisions can be found in most other provinces,5 although in

some others the jurisdiction is derived from the express preservation

of general equitable jurisdiction.6

It may appear paradoxical to award damages in lieu of an equit-

able remedy that is itself conditional on proving that damages is an

inadequate remedy. But as we shall see, there are two situations where

equitable damages come in to their own: where there is no common

law remedy at all, or where the defendant has raised suff‌icient argu-

ments against the awarding of specif‌ic performance or injunction so

that the court is left with no alternative but to award damages. In addi-

tion, where equitable damages are given in lieu of an injunction, the

damages wil l often be for future losses in situations where common law

damages would not be available until there is actual loss.

Of late, the continued vitality of equitable damages as a distinctive

form of redress has been undermined by developments in the avail-

ability of common law damages and equitable compensation. However,

there are still important areas of difference. These will be the focus of

this chapter.

B. JURISDICTION

The legislative jurisdiction for equitable damages states that they can

be awarded in addition to or in substitution for an injunction or specif‌ic

performance. Thus, if a court has jurisdiction to grant either an injunc-

tion or specif‌ic relief, it also has jurisdiction to grant equitable dam-

ages. In the past much debate was generated over whether barriers to

specif‌ic performance and injunctions went to jurisdiction or merely

discretion. If the barrier went to jurisdiction, then no damages could

be awarded in lieu of the equitable relief. However, if the barrier was

5 See Alberta Judicature Act, R.S.A. 20 00, c. J-2, s. 19; Manitoba The Court of

Queen’s Bench Act, C.C.S.M. c . C280, s. 36; Saskatchewan The Quee n’s Bench

Act, 1998, S.S. 1998, c. Q-1.01, s. 66(1); and Prince Edward Isla nd Judicature Act,

R.S.P.E.I. 1988, c. J-2.1, s. 42.

6 See Nova Scotia Judicat ure Act,R.S.N.S. 1989, c. 240, s. 41; British Columbia

Law and Equity Act, R .S.B.C. 1996, c. 253, ss. 2, 4, & 5. In Newfoundland there

appears to be s omething of a lacuna, where the a doption of English law took

place before the en actment of Lord Cairn’s Act and where no similar prov ision

has since be en enacted.