The appellants (tenant and its successor) repudiated a commercial lease for an industrial property owned by the respondent.
The respondent was forced to sell the property and sued for damages.
The trial judge awarded $1,277,000 in damages, including lost rental profits and lost capital appreciation.
The appellants appealed, arguing the sale at fair market value fully mitigated damages and that lost capital appreciation was too remote.
The Court of Appeal allowed the appeal, finding that damages for lost capital appreciation were too remote under the Hadley v. Baxendale test, that the property was sold at fair market value, and that damages should be calculated using a discounted cash flow analysis based on the 2013 sale price with appropriate deductions for mitigation.
