Equitable Damages

• Author: Jeffrey Berryman
• Pages: 449-475

449

CH APTE R 17

EQUITABLE DAMAGES

A. INTRODUCTION

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

award equitable damages. Hi storically, chancery always exercised a

jurisdiction to award monetar y awards, either as equitable compen-

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

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 w ith jurisdiction to award damages in

claims for injunctions and speci f‌ic performance.3 Although the leg isla-

tion was subsequently repealed it s sentiments have been retained, prin-

cipally in legislation th at describes the composition, procedure, and

jurisdiction of superior court s. In Ontario, section 99 of the Courts of

Justice Act4 reads 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 RE MEDIES450

A court that ha s jurisdiction to grant an injunct ion or order specif‌ic

performance m ay award damages in addition to, or in subst itution

for, the injunction or specif‌ic perform ance.

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

some others the jurisdiction is derived from the express preservat ion

of general equ itable jurisdic tion.6

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

able remedy that is itself conditional on proving that da mages is an

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

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

law remedy at all, or where the defendant has rai sed 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 l ieu 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 import ant areas of difference. These will be t he focus of

this ch apter.

B. JURISDICTION

The legislative jurisdiction for equitable damages states t hat 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 barrier s to

specif‌ic performance and injunctions went to jurisdiction or merely

discretion. If the bar rier 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.