The appellant entered into a 36-month exclusive agency contract with the respondent, which included an early termination clause allowing the respondent to terminate on three months' notice after the 18th month.
The respondent wrongfully repudiated the contract at 16 months.
The trial judge awarded damages based on the full 36-month term less a 25 percent discount, and awarded solicitor-and-client costs due to unfounded allegations of dishonesty.
The Court of Appeal reduced the damages to reflect the early termination clause as the maximum exposure, and reduced the costs to a party-and-party scale.
The Supreme Court of Canada dismissed the appeal on damages, affirming that damages for breach of a contract with alternative modes of performance are assessed based on the mode least burdensome to the defendant.
However, the Court allowed the appeal on costs, restoring the trial judge's award of solicitor-and-client costs.
