Elizabeth Kathleen Ackman

The court considered whether a single-purpose corporate purchaser seeking specific performance after a failed land transaction was exempt from the mitigation principle in contract damages.

The majority held that incorporation benefits carry corresponding burdens, including reasonable mitigation efforts where substitute opportunities are available.

It concluded the purchaser lacked a substantial and legitimate basis to avoid mitigation and that the evidentiary record supported available comparable development opportunities.

The dissent would have restored trial damages, finding no palpable and overriding error on mitigation opportunity and reasonableness.

The appeal and cross-appeal were both dismissed, leaving the appellate reduction to nominal damages in place.

The Court of Appeal previously allowed the defendant's appeal, reducing the plaintiff's damages for breach of contract from $1,935,500 to nominal damages of $1 due to a failure to mitigate.

In this costs endorsement, the court applied the cost consequences of Rule 49.10(2) because the plaintiff obtained a judgment less favourable than the defendant's pre-trial offer to settle for $100,000.

The defendant was awarded net partial indemnity costs of $400,000.

The appellant school board breached an agreement of purchase and sale by failing to use its best efforts to obtain a severance for a parcel of land.

The respondent purchaser sued for specific performance or damages.

The trial judge awarded damages for lost profits.

On appeal, the Court of Appeal upheld the finding of breach but allowed the appeal on the issue of mitigation.

The Court found that the respondent, a single-purpose company, admitted it had no intention of mitigating its damages and took no steps to do so, despite its parent company purchasing other comparable properties.

The judgment was set aside and nominal damages of $1 were substituted.