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Remedies – Fall 2007Remedies – Fall 2007Professor: Stephen SmithProfessor: Stephen Smith

Notes: Laurence Bich-CarrièreNotes: Laurence Bich-CarrièreDo remedies exist? Is the law of remedies a mess? Do remedies exist? Is the law of remedies a mess?

Is history the only explanation? Why can't people use theIs history the only explanation? Why can't people use theproper words when it comes to injunction and restitution?proper words when it comes to injunction and restitution?

Table of Contents.Table of Contents.A. INTRODUCTION..........................................................................................................................4

I. DEFINITIONS AND ORGANISATION....................................................................................41. WHAT IS REMEDIES ABOUT?.............................................................................................4

1.1. THE UNDER-DISCUSSED AND VERY COMMON-LAWY LAW OF COURT ORDERS......................41.2. THE LAW OF REMEDIES AS PUBLIC LAW...............................................................................5

2. ORGANISATION......................................................................................................................52.1. SS'S OR, RR, COR...............................................................................................................52.2. BIRKS AND SS: RIGHTS, WRONGS AND REMEDIES.................................................................6

3. DISCRETION............................................................................................................................8Recap – Remedies, Wrongs & Rights and Discretion.................................................................................9

II. EQUITY.......................................................................................................................................91. ORIGIN......................................................................................................................................92. TERMINOLOGY....................................................................................................................103. FEATURE OF EQUITABLE REMEDIES...........................................................................104. METHOD OF REMEDIAL SELECTION...........................................................................10

Recap – Equity...........................................................................................................................................11B. INJUNCTIONS.............................................................................................................................11

0. INTRODUCTION...................................................................................................................111. DEFINITION...........................................................................................................................112. ECONOMIC UTILITY...........................................................................................................12

I. QUIA TIMET INJUNCTIONS (AND THE PROBLEM OF RIPENESS)............................121. WHAT IS IT?...........................................................................................................................122. PRINCIPLES FROM CASE LAW........................................................................................13

II. MANDATORY INJUNCTIONS: SUPERVISION AND CONSTRAINT ON LIBERTY.131. DEFINITION AND PUBLIC POLICY.................................................................................132. MANDATORY INJUNCTION AND LIBERTY.................................................................14

III. INJUNCTIONS TO PROTECT PROPERTY INTERESTS...............................................141. INTRODUCTION...................................................................................................................142. CHATTELS..............................................................................................................................143. TRESPASS TO LAND............................................................................................................144. NUISANCE..............................................................................................................................15

4.1. INTRODUCTION....................................................................................................................154.2. NUISANCE DOESN'T ALWAYS GUARANTEE INJUNCTION AS A REMEDY...............................154.3. UTILITARIAN AMERICAN CASE LAW...................................................................................16

5. FINAL COMMENTS..............................................................................................................17Recap – Equity and Injunctions.................................................................................................................18

C. DIRECT ENFORCEMENT OF A RIGHT................................................................................18I. PROPRIETARY RIGHT: GETTING YOUR STUFF BACK...............................................18

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0. INTRODUCTION...................................................................................................................181. DELIVERY UP OF GOODS..................................................................................................19

1.1. THE RULES..........................................................................................................................191.2. THE HISTORY......................................................................................................................19

2. EJECTMENT (RECOVERY OF LAND).............................................................................20II. AWARD OF A SUM DUE UNDER A CONTRACT.............................................................20

1. DEBT........................................................................................................................................201.1. LOOKS LIKE SP BUT IT AIN'T SP.........................................................................................20

2. MONETARY OBLIGATIONS AND STIPULATED DAMAGES CLAUSES.................21Recap – Direct Enforcement of a Right: Proprietary Claims...................................................................22

III. SPECIFIC PERFORMANCE................................................................................................231. INTRODUCTION...................................................................................................................232. NON-PERSONAL OBLIGATIONS......................................................................................25

2.1. NON-PERSONAL OBLIGATIONS WITH REGARD TO PROPERTY..............................................252.1.1. Sale of Goods...............................................................................................................252.1.2. Sale of land..................................................................................................................25

2.2 NON-PROPRIETARY NON-PERSONAL OBLIGATIONS ‘TO DO’..............................................253. PERSONAL OBLIGATIONS................................................................................................254. THEORIES OF SPECIFIC PERFORMANCE: HOW TO TIE ALL THIS.....................26

Recap – Specific Performance...................................................................................................................26IV. EQUITABLE DEFENCES (MAXIMS OF EQUITY)..........................................................27

0. WHY SUCH DEFENCES?.....................................................................................................271. EQUITY WILL NOT AID A VOLUNTEER.......................................................................272. LACK OF MUTUALITY.......................................................................................................273. CLEAN HANDS DOCTRINE................................................................................................274. LATCHES................................................................................................................................285. UNFAIRNESS AND HARDSHIP..........................................................................................28

Recap – Equitable Defences......................................................................................................................28D. MONETARY RELIEF (DAMAGES).........................................................................................28

I. COMMON-LAW DAMAGES...................................................................................................281. WHAT ARE DAMAGES?......................................................................................................29

1.1. UN GROS FOURRE-TOUT.......................................................................................................291.2. WHAT DO WE MEAN BY “COMPENSATION?”.......................................................................29

2. COST OF CURE......................................................................................................................292.0. INTRODUCTION: WHAT IS COST OF CURE? HOW IS IT NOT THE SAME AS DAMAGES?.......29

Discussion: what do we think of a cost of replacement bright-line?.............................................................302.1. COST OF CURE FOR BREACH OF CONTRACT.......................................................................302.2. COST OF CURE FOR DAMAGE, DESTRUCTION, OR LOSS OF PROPERTY..............................30

3. MITIGATION, TIMING AND REMOTENESS: IT'S A MESS........................................303.1. MITIGATION........................................................................................................................303.2. TIMING ISSUES: WHEN ARE DAMAGES ASSESSED?..............................................................31

3.2.1. General rule: at the time of breach.............................................................................313.2.2. Exceptions....................................................................................................................32

Recap – Common Law Damages...............................................................................................................33II. EQUITABLE DAMAGES: WHEN EQUITY GIVES MONEY..........................................33

1. EQUITABLE DAMAGES (DAMAGES UNDER LORD CAIRN'S ACT).........................332. DAMAGES FOR EQUITABLE WRONG: “EQUITABLE COMPENSATION”...........34

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2.1. GENERAL PRINCIPLES (WITH LUCK)....................................................................................34Discussion on Breaches of fiduciary duties....................................................................................................35

2.2. REMOTENESS.......................................................................................................................35Discussion on this...........................................................................................................................................36

Recap – Equitable Damages......................................................................................................................36III. NON-COMPENSATORY DAMAGES..................................................................................37

1. PUNITIVE DAMAGES..........................................................................................................372. NOMINAL DAMAGES..........................................................................................................38

Recap – Non-Compensatory Damages......................................................................................................38E. RESTITUTIONARY RELIEF....................................................................................................39

0. INTRODUCTION......................................................................................................................390. INTRODUCTION...................................................................................................................391. TRADITIONAL UNJUST ENRICHMENT.........................................................................392. ENRICHMENT FROM SERVICES.....................................................................................393. ENRICHMENT THROUGH WRONGDOING (SEE P. 39)..............................................39

I. RESTITUTION AS A RESPONSE TO UNJUST ENRICHEMENT....................................391. PERSONAL REMEDIES.......................................................................................................402. PROPRIETARY REMEDIES................................................................................................40

2.1. TYPES OF PROPRIETARY REMEDIES.....................................................................................402.2. REASONS FOR PROPRIETARY REMEDIES..............................................................................412.2. DO CT ORDERS REPLICATE A RIGHT OR ARE COURTS CREATING A NEW RIGHT?...............41

3. TRACING................................................................................................................................42Recap – Restitution: from traditional UE and mistaken payment to insolvency and tracing...................42

II. GAIN-BASED AWARDS.........................................................................................................431. INTRODUCTION...................................................................................................................43

1.1. ARE THEY FAIR?..................................................................................................................431.2. CASES IN WHICH GAIN-BASED AWARDS ARISE....................................................................44

2. TORT........................................................................................................................................442.1. THE PROBLEM OF MESNE PROFITS.......................................................................................442.2. THE PROBLEM OF HISTORY (SEE ALSO CURWEN)...............................................................45

2.2.1. History: strict categories.............................................................................................452.2.2. Today: one wrong, two remedies.................................................................................46

3. BREACH OF FIDUCIARY DUTY.......................................................................................464. BREACH OF CONTRACT....................................................................................................475. GAIN-BASED PROPRIETARY AWARDS.........................................................................48

5.1. THE ISSUES..........................................................................................................................485.2. THE RULES..........................................................................................................................48

Recap – Gain-Based Awards: Personal and Proprietary Claims.............................................................48READING NOTES TABLE OF CONTENTS ..................................................................................... 46

A. IA. INTRODUCTIONNTRODUCTION

I. Definitions and OrganisationI. Definitions and Organisation

1. WHAT IS REMEDIES ABOUT?

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1.1. The under-discussed and very common-lawy law of court ordersRemedies is a class about courts orders (e.g., order to perform, order to pay damages, order not to

trespass, declaration of trust). Relatively little has been written on the topic and it's a very common law topic. It seems strange (to SS anyways) that there be no real classification of remedies when they are this important in the organisation of the writ system. SS thinks this may be explained by the fact that the classifications of common law where mostly made by Blackstone who drew a lot on French law, where there is no law of remedies, most probably because whereas the common law is a practitioner's affair, the civil law is “made” by doctrinal authors for whom only the substance matters.

SS: sure, this might explain some things, but can it account for the absolute lack of books on remedies? Some (common law) authors suggest it's because the law of remedies is a sham because all court orders replicate rights given by contract, the law of torts, etc. On this view, you get a court order for breach of contract because of the rights given to you by the contract; you get to be reimbursed because no one has the right to be unjustly enriched, etc. It's a very substantive approach (akin to the French one). But SS thinks it would be unduly restrictive and even perhaps absurd to say that remedies are always pre-existing orders.

We'll see a bunch of examples where the court does not replicate the order (e.g. specific performance being replaced so often by damages, see p. 32), but it also works the other way around: prescription doesn't trump the right, only the order (i.e. the obligation still exists and if the would-be defendant pays up, no restitution is possible and the would-be plaintiff doesn't have to disgorge). Also, if the duty is not only to stop trespassing but also to give damages for pass trespasses, there's a new obligation added to the respect of property one. And what about punitive damages? If it's true that one may pay damages for breach of contract in the absence of a court order, no defamer will pre-punish themselves (this also explains why some people are so against punitive damages1) or nominal damages (i.e. a public declaration of wrongness where no damage has occurred). Finally, note that in Australia, where the courts are really strong on discretion, the court can order whatever it wants2.

So one of the questions in this class is: when do courts replicate existing duties and when do they create new ones?

1.2. The law of remedies as public lawOn a certain view, while the law of remedies seems to be private law because the rights that

are vindicated arise between individuals in private law contexts (contracts, torts, etc.), it is really public law in the sense that the remedies are about the right of the individual against the Court/State and its agents, the right of private parties to ask a part of the public system to vindicate its rights, give them what they are entitled to.

2. ORGANISATION2.1. SS's OR, RR, CORSTEPHEN SMITH, “COURT ORDERS” [EXCERPT FROM PROPOSAL]

Why a project on court orders? Concluding step of the legal process, courts orders are the most tangible product of our court system. Also, the rules are known but there has been no systematization of the topic, it is scattered in various substantive law pieces. Three reasons for classification: (1) court-orders are a distinct body of law 3; (2)

1 SS says punitive damages always piggy-back another court order. 2 And L'Heureux-Dubé is also a strong advocate of discretionary remedialism. 3 «The project is motivated by three main ideas. The first is that the rules on court orders constitute a distinct body of law: the rules on court orders establish when and on what grounds courts will make orders that either confirm pre-existing rights (e.g. the return of money paid by mistake), transform existing rights (e.g. by awarding a victim of a contract breach money to obtain an alternative performance), or create new rights (e.g. to a payment of punitive damages). This is “remedial” law as opposed to “substantive” law. Substantive law establishes the rights that individuals have against other individuals either prior to going to court (“pre-existing” rights) or after court orders

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importance of remedies in law (it's the force of the state in a private dispute); (3) lack of knowledge; lack of clarity (it was filled in the C19 with the forms of action).

In the end, SS hopes to produce a monograph with three primary aims: (1) define the subject-matter; (2) create a framework (when do courts make orders, when do they not replicate the ordinary right?); (3) apply the framework to court orders (instead of replicating the traditional classifications, legal provenance (e.g. “Equity/Law”), cause of action (e.g. “contract/tort”), and purpose (e.g. “compensation/punishment”), orders will be classified primarily on the basis of their relationship to the parties‘ pre-existing rights).

For our purposes, we will speak of three kinds of rights. First, the Ordinary (substantive) rights: these are the rights between two persons, the rights against

other individuals, it is the private law rights, the rights of duties. Examples could be: the right to have a debt paid or the right not to be defamed. [primary rights]o Personal rights: rights against another(specific) person (e.g. contractual rights)o Proprietary rights: erga omnes rights (not necessarily property)

Remedial rights4: these are the individual's rights against the courts, or rather, that the court make a certain order, for instance, the right to compensation.

Court-ordered substantive rights: these rights are the new rights created by courts, sometimes they mirror substantive rights (e.g. specific performance), sometimes they don't (e.g. punitive damages). [secondary rights]o We will be discussing rights and remedies on two axes: the existence of the right and its

content. The existence, the availability of the court-ordered right is not justified by the mere existence of the ordinary right, it must always flow from the court itself (and, to a certain extent, the remedial rights); however, the content of the court-ordered right is function of its source, in order words, of the ordinary right5.

o However and this is for SS very important, sometimes, the content of the court-ordered right is not exactly that of the ordinary right, i.e. there is a transformation. For instance, a defamer might be ordered to compensate the defame and to pay punitive damages.

2.2. Birks and SS: rights, wrongs and remedies. Birks (PETER), “INTRODUCTION” FROM ENGLISH PRIVATE LAW (2000) [PDF]

SS sees three levels to private law6: A superstructure (the concepts that apply to everyone: perform your contracts, compensate

the injured, etc.). SS say these rights support the law (the law is based on these (often moral) principles), but there cannot be enforced per se because they are too general to be operational.

Then you have legal rights those that arise from particular juridical acts or facts7 events. o They can be rights (or non wrongs), i.e. the primary rights (Birk's causative events:

contracts, UE, etc.)

are made (“court-ordered” rights). Remedial law establishes rights to court orders. These two categories of rights demand different explanations. The conclusion that a plaintiff has a pre-existing substantive right to delivery of a car (say because of a contract) does not tell us what a court should do if this right is infringed.»4 Should they really be called rights? He doesn't care. 5 Like contracts, you can't really make one by accident (you change legal rights, etc.), they are "juridical acts". However, there are no legal rules about why contracts should be made (we have rules on how, but otherwise, the people decided) whereas the reason for court orders is remedial rights.6 Unless otherwise indicated, passages in dark red come from Yemeni's summary, based on one credited to “Noah”. 7 What a Civilist turn of phrase.

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o or wrongs considered a secondary duty (compensation, disgorgement of profits) with often, an idea of punishment.

Finally, you have court orders (orders that give way to rights, that can be enforced because the court ordered them). The court generally responds to a wrong here (point of dissension between Birks and SS, SS saying that the order is not the response, just a causative event).

Birks says that there are three criteria for classification of remedies: Exigibility: against whom can the right be asserted8) Causative event9

o Consent (mostly contract, but also trust)o Unjust enrichment (UE; transfer of money by mistake)o Wrongs o Miscellaneous (e.g. earning taxable income, salvage fees, Birks puts court orders in there)o Duty not to harm?

Content.

BIRKS (PETER), “RIGHTS, WRONGS AND REMEDIES”, (MARCH 2000) OXFORD J. OF LEG. ST.Summary of the taxonomy issue: The court’s responses to wrongs should be the recognition of rights, which should not be termed

“remedies” (the word “remedy” is misleading); we should use “rights” instead to describe the law’s response to an injury, since calling rights “remedies” can get you into trouble (either term is appropriate when describing the substance of a court’s order). Rights are usually remedies, but we should not use “remedy” where we mean “right”; by calling court orders “remedies” as opposed to “rights,” we falsely suggest that they are responses to wrongs. Courts realize rights from “wrongs” and from “not-wrongs” in the case of a “not-wrong,” the court is not being asked to remedy a wrong but to realize a primary right. Without effective taxonomy, Birks claims, a court will not treat like cases alike and will therefore compromise the rule of law.

Blackstone said: there are rights, there are wrongs, there are remedies. But Birks (and SS) say this is misleading since the remedy is a right that comes from a court order. This being said (SS), the remedies are procedurally different (e.g., to vindicate your right, you ask the court; to vindicate your court order, you ask the bailiff).

Birks' second argument is that remedies do not always arise from wrongs, they may also arise from non-wrongs (for instance, a contract or UE or income earning10). SS criticises Birks for not deriving remedies from wrongs: if you want specific performance, you must show that you had agreed on performance (contract) and that no performance occurred (breach of contract). And that is a wrong.

Obbiche : but couldn't we way that the content of the remedy is shaped by the right and that its issuance warrants a wrong?

8 Could be an easy difference between public and private law. 9 SS thinks this is very wrong and that rights are one of the main causes; Birks disagrees: following the Romans, Birks would say that, strictly speaking, there is no legal right to be injured: simply because you can't prohibit someone from committing battery or negligence (oh so no Civilist). SS thinks its incorrect because: how is a wrong a wrong if there is no right? SS thinks you could just not align rights and court orders. 10But isn't the wrong to refuse to give the money back rather than the breach the contract? It is true to say that the content of the court-order sometimes replicates a duty that arose from a non-wrong, but it seems misleading (because there's a wrong). It's the difference between enforcing a right and correcting a wrong. As for Birks, let's note that he was working of UE, where as soon as the money is deposited in the wrong account, there's a wrong.

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SS: Birks scheme works between individuals, but once the courts are part of the equation, it's a whole other matter. SS thinks it's allocation of resources (political view).

Now, how are they linked? The natural explanation is that the COR arises from a RR (a right, you have a right to such an order), deriving from an OR.

SMITH (STEPHEN), "THE LAW OF DAMAGES: RULES FOR COURTS OR RULES FOR CITIZENS" (2007)«In the Western legal tradition, rights are typically categorized on the basis of three questions: (1)

against whom may the right be asserted (e.g. a promisor; State or citizen, in the latter can, personal or proprietary); (2) what is the [cause] that gives rise to the right (e.g. a promise); and (3) what is the content of the right (e.g. to the performance of the promise).» SS classifies the rights linked to the law of remedies in three categories.

First, the ordinary rights, i.e rights that citizens hold against other citizens arising from ordinary (not court-ordered) event (e.g. contract, transferring money by mistake): for example, the right to the performance of a contractual obligation and the right to the return of money paid by mistake. «Ordinary rights are the substantive rights that plaintiffs bring with them when they come to court.»

Second, the remedial rights, i.e. rights to court orders, "causes of actions". Like ordinary rights, remedial rights arise from ordinary (or ‘non-judicial’) events, so the content is similar. However, there is a difference as to their exigibility (i.e. against whom the right may be asserted): ordinary rights are asked from other individuals (purely private), remedial rights are asked from a court/organs of the State (so they are public law rights).

Thirdly, court-ordered rights, i.e. rights that courts must take into account when contemplating making an award of damages. They arise out of a juridical (judicial event) act. Their content often replicated that of ordinary rights (as to content and exigibility), but a transformation can occur. They are also private law rights.

There are four kinds of court orders: (1) a mixed private/public law explanation (the court order is a mixed of the ordinary and remedial

rights, e.g. order to pay a debt according to certain timely rules11); (2) a pure private law explanation: the court orders replicate the ordinary right, but the plaintiff has no

remedial right (e.g. equitable/discretionary remedies12); (3) a pure public law explanation: the court order doesn't replicate the ordinary rights, which means a

new "ordinary" right was created (e.g. award of money restitution when UE occurred because of delivery of goods to the wrong person) – the change can only be explained through the idea that the order given in the end is better than the ordinary right, this is public-law thinking;

(4) no legal explanation: existence and content of the order are purely discretionary (e.g., remedial constructive trust in common law relationship, proprietary estoppel, punitive damages).

For Zakrzweski, most the law of damages is about not about remedies because all the courts do when awarding damages is replicating a pre-existing duty. The second a person is injured, you have a duty to compensate them: the court order is a mere confirmation of that order.

ZAKRZWESKI (Zack), Remedies Reclassified (2000) [see PDF]Remedy is used in all sorts of ways. Most commonly, it means judgement or court order. Burrow says

it may be coercitive or not. But even within the realm of court orders, it may mean (1) the event;(2) the command or statement; (3) the order document; (4) the rights generated. Usually the latter, thus a juridical relation.

Terminological mistakes often made. (1) An action or cause of action should not be called remedy: call it a suit or an action for the process and cause of action when referring to the set of facts that

11 But that's the specific performance of a monetary obligation! Yes, but courts don't care and don't treat it like that. 12 SS thinks this is not true.

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empower the court to grant relief; (2) a secondary right should not be called a remedy because (a) the term remedy is usually attached to concept that have nothing to do with secondary rights; (b) not every infringement of a right creates a secondary right; (c) if the remedies are secondary rights, one cannot talk about discretionary rights; (3) a primary right should not either be called a remedy: Birks argument; (4) Means of enforcement of court orders should not be called remedies: they arise from non-compliance with remedies, i.e. they are a distinct step; (5) final outcome should not be called a remedy because it blurs the line between juridical and non juridical conceptions.

Substantive rights and remedies. Author believes the line between substance and remedy should not be drawn between primary and secondary rights, rather between these rights and court orders [53].

Existence. One may wonder whether substantive rights exists at all: after all, for Holmes "the duty to keep a contract at common law means a prediction that you must pay damages if you do not keep it –and nothing else". Also: which come first, remedies or substantive rights? For the non-common lawyer, it seems that the remedy pre-exists the right (because it may arise on a totally new set of facts), but at the same time, the common law pre-exists (so one cannot ask for a disgorgement because of a mistake in the law13)…

Questions: can remedies exist without rights? Yes if a right is granted for the first time, there is no right yet. And the converse? Yes: one can have a right but cannot see it enforced (prescription, want of form, etc.). So the maxims ubi remedium ibi jus and ubi jus ibi remedium are not fully true.

3. DISCRETION. Big questions: should courts have discretion? One argument in favour is to prevent

wrongdoers from planning their wrongful behaviour).BIRKS (PETER), “RIGHTS, WRONGS AND REMEDIES”, (MARCH 2000) OXFORD J. OF LEG. ST.

Summary of the discretionary remedialism: Discretionary remedialism is bad. Logical argument: there should be no room for discretion in the

absence of a wrong. [Fine, but there usually is a wrong]. Rule of law argument: discretion hinders foreseeability [but it's more flexible]

Discretion is choice. There is no discretion in payment by mistake cases: the courts must order restitution (can't ask for compensation, the accepiens didn't commit a wrong). However, in breach of contract the courts can order specific performance or damages.

Discretion can have three meanings: (1) courts have the last word; (2) soft discretion in applying the law to the facts (Ruxley); strong discretion (Australia).

There's only discretion where a wrong has been committed. SS suggests there is more discretion with regard to punishment and symbol. No discretion for enforcement of prior rights.

Recap – Remedies, Wrongs & Rights and Discretion Remedies are about court orders. Some say it's not an area of law because all court orders

replicate pre-existing duties that arise in more substantive areas of law (contract, torts, etc.). This is a very civilist approach and it can't be fully true (think of prescription, substitute performance, etc.). The law of remedies is also public law in the sense that the orders are given by the courts, which form part of the State.

On SS's classification, there are three kinds of rights: (1) the ordinary/substantive rights, i.e. the private law rights, the duties; (2) the remedial rights (the individual's rights that the court make a certain order in their favour); (3) the court-ordered (substantive) rights: what the court actually orders (these sometimes replicate ordinary rights, almost all the time thinks Zakrzweski, but not always, they sometimes have discretion, see Birks part. 2).

There is a question as to what causes remedies: Birks says "remedies" is misleading and that we should always speak of rights. SS thinks it's wrong because most often courts grant remedies

13 See Benson v. Lincoln City Council, [1999] 2 AC 349 (HL).

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because a wrong has occurred. I think we could say that the content of the remedy is shaped by the right and that its issuance warrants a wrong.

Discretion, which can be strong of soft is about choice of remedy (the remedy itself or of the facts giving rise to the remedy). Birks was very much against discretionary remedialism, and Australians are very much for it: it's the flexibility versus predictability debate. Birks think, and most agree, that there should be no discretion in the absence of a wrong.

II. Equity.II. Equity.

Enforcement of Primary Rights – Overview: primary rights and duties arise through events, namely non-wrongs (promises, mistaken payments [UE]); as such, in order to enforce primary rights, the court generally uses equitable remedies such as injunctions, SP and restitution rather than granting damages.

1. ORIGINThe body of rules we refer to as equitable rules grew in the common law in response to the

view that many of the rules that came out of the courts of law were too rigid. People started filing complaints, and the King appointed his Chancellor to deal with them. Technically, there's not about equity overturning the common law, it's just about "adding gloss". Often equity was more moralistic. With the Judicature Act, these bodies were merged (“fused”), which usually makes sense: one set of rules (the common law) with exceptions (equity). But the lawyers continue to refer to certain rules as being equitable rules/coming from equity. The debate is whether the morality of equity is distinct from that of the common law.

Question: does it matter that such remedies are a product of equity?Answer: in a sense, yes, because it creates an incident today (see below).

2. TERMINOLOGYRemedies from equity are specific (exactly what requested) as opposed to substitutionary

(replacement). Now there is some kind of mix-up between specific performance and injunctions. In a sense, a mandatory injunction is not really different from specific performance, however, it happens that we only talk of specific performance in contractual settings unless the contractual obligation is negative (e.g. a restrictive covenant), in which case we'll usually and generically speak of injunctions.

Perhaps because of this confusion, specific performance and injunctions are often encompassed in the term specific relief, i.e. (1) an order other than monetary award and (2) an order, historically, coming from equity14.

3. FEATURE OF EQUITABLE REMEDIES. They are not monetary (discussion of this in Hooper v. Rogers); They are backed up by threats of contempt; You only get them if damages are inadequate (because to go to equity courts, you need

to show the common law courts were inadequate).

14 Which almost amount to the same because they historically Chancery orders were never monetary (with the exception of Lord Cairn's Act.

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You also have equitable defences/bars (hardship, clean hands, etc., see p. 25); Courts have discretion to give equitable orders (you are a supplicant in equity, asking for

an exception; whereas in common law, you demand, as of right);

4. METHOD OF REMEDIAL SELECTIONIn deciding whether an injunction/specific performance should be ordered (as opposed to finding against the ptf or simply ordering a cml remedy), three questions should be asked:

1. has a cause of action been made out? There must be a substantive cause of action or a violation of the ptf’s rights. These depend on what rights you have. Issues of rights cannot be decided in a

remedial vacuum courts are more or less willing to protect rights depending on the remedies attached to them. Remedies are thus connected to substantive, not to procedural, law. Right and remedies are entangled.

2. are the cml damages adequate? If awarding compensatory damages (substitutionary relief) is insufficient, then awarding equitable damages (specific relief) might be adequate instead. Ptf must demonstrate that irreparable harm would be suffered if specific relief were not granted.

3. are there any equitable bars that apply (e.g. whether the remedy causes undue hardship for the dft)? There must not be any discretionary factors that discourage giving specific relief. Court takes into account :

o dft’s interestso public policyo cost to dft vs. cost to ptf (this is what’s known as balance of cost/convenience:

e.g. adding a foot to the depth of a pool)o malice/degree of moral blameworthiness (moralistic concerns = hallmark of

equity)o whether the order would be too vague/whether it could be specific enough

court can’t just order a neighbor to stop a nuisance (since it interferes with the ptf’s reasonable enjoyment of property) because that is a superstructural right and the court doesn’t enforce those; rather it must order them to do or not do something relatively specific (e.g. stop burning tar your backyard)

o effectiveness/efficiency of court’s processes (e.g. not in court’s interest to have to supervise ptf’s future behavior, particularly an order unlikely to be obeyed).

Recap – Equity Equity is a court of conscience, created to “supplement” (but not contradict) the common

law. The rules are often less strict (Canson, Hodgkinson, Soulos; a lot of discretion too). Also, remedies from equity are specific (exactly what requested) as opposed to substitutionary (replacement). and it permits stuff the common law is reluctant to (SP being the best example, see p. 21). There is a debate today as to the extent of the “fusion” of the common law and equitable jurisdiction of courts.

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Equitable remedies are not monetary (unless Lord Cairn's Act, see p. 32), are only granted where damages are inadequate, are backed up by threats of contempt, are discretionary and are subject to equitable bars (see p. 25).

The expression specific performance, used in the contractual setting, is replaced by the term injunction where the contract obligation is negative.

B. IB. INJUNCTIONSNJUNCTIONS

0. Introduction0. Introduction1. DEFINITION

An injunction is an order to stop (or do) something that will create a wrong if it's not stopped, e.g. trespass. Injunctions can be permanent or temporary15

To characterize and injunction, you must answer three questions: (1) is the remedy sought pre-emptive (quia timet injunction) or ex post facto

(“real”/ordinary injunction)? (2) also, are they mandatory or regular? (3) what is the interest at stake (the ordinary right at issue: trespass, nuisance, etc.).

2. ECONOMIC UTILITYInjunction is a great example for the Coase Theorem, which is about efficiency (utility)

more than justice and which says that given they act rationally, parties will eventually negotiate the best resolution to the dispute (the party with the strongest economic interest will gain the particular right). Applied to the remedies problem, it means that after the decision of the court, the parties can negotiate16 to “correct” the decision (it only settles certain variants but the party who has the greater interest in getting the right will negotiation to get it).

This theory has three shortcomings: doesn't take third parties into account (had the river been polluted, there could have been a class action, for instance), doesn't factor in transaction costs (time, lawyers, etc.) and assumes people act rationally (no free-riders; no hating each other as in Ruxley). See p. 15 and 24.

15 Interim = valid for a set period; interlocutory = valid until trial. 16 Example #1: Suppose it would cost Bealey $1,000 to stop polluting the river, but it would cost Flecther $1,500 to install his own filter to stop the effects of the pollution coming from Bealey. According to this theory, since it’s cheaper for Bealey to stop the harm, if no injunction was granted Fletcher would likely call Bealey and offer to pay him a dollar more than what it would cost Bealey to stop the pollution. Bealey, knowing that it would cost Fletcher $1,500 to stop the pollution himself, would demand just under that amount to do it. Eventually, they would negotiate down to a figure btwn $1,001 and $1,499. Example #2: Suppose it would cost Bealey $2,000 to stop the pollution, but it would cost Fletcher only $1,000 to stop it. According to this theory, if an injunction were granted, then Bealey would call up Fletcher and offer him $1,001 to stop the pollution himself. But since Fletcher knows it would cost Bealey $2,000, he would demand $1,999. They would negotiate and eventually settle on an amount btwn $1,001 and $1,999. By definition, as long as an injunction is granted, parties can negotiate around it . Example #3: Similar to Woollerton, suppose one party was trespassing on the other’s property b/c they were doing construction and they’re crane was passing through their neighbour’s airspace. If an injunction were granted to prevent this trespass, which would effectively cost the trespasser $15,000 to do without, the parties would negotiate around the injunction and the right to trespass would eventually be bought for some amount lower than $15,000.

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I. I. Quia TimetQuia Timet Injunctions (and the problem of ripeness) Injunctions (and the problem of ripeness)1. WHAT IS IT?

A quia timet injunction (literally, “since he fears”) is a permanent injunction that serves to restrain a violation of rights before those rights have been violated. This remedy granted before commission of a wrong is made to avoid future violation (on justification, see below), or more future violation.

From Fletcher v. Bealey, (1885), 28 Ch. D 688, we have:“It is admitted that the action is brought, not to obtain damages for a past injury, but to prevent that which is feared as a future injury, or, to use the more technical expression, the action is a quia timet action […] …there are at least two necessary ingredients for a quia timet action. There must, if no actual damage is proved, be proof of imminent danger, and there must also be proof that the apprehended damage will, if it comes, be very substantial. I should almost say it must be proved that it will be irreparable, because, if the danger is not proved to be so imminent that no one can doubt that, if the remedy is delayed, the damage will be suffered, I think it must be shewn that, if the damage does occur at any time, it will come in such a way and under such circumstances that it will be impossible for the Plaintiff to protect himself against it if relief is denied to him in a quia timet action.”

From Redland Bricks v. Morris, [1970] A.C. 652: “But to prevent the jurisdiction of the courts being stultified equity has invented the quia timet action, that is an action for an injunction to prevent an apprehended legal wrong, although none has occurred at present, and the suppliant for such an injunction is without any remedy at law. My Lords, quia timet actions are broadly applicable to two types of cases. First, where the defendant has as yet done no hurt to the plaintiff but is threatening and intending (so the plaintiff alleges) to do works which will render irreparable harm to him or his property if carried to completion. Your Lordships are not concerned with that and those cases are normally, though not exclusively, concerned with negative injunctions. Secondly, the type of case where the plaintiff has been fully recompensed both at law and in equity for the damage he has suffered but where he alleges that the earlier actions of the defendant may lead to future cases of action. ”

2. PRINCIPLES FROM CASE LAW Fletcher v. Bealey: in the absence of actual damages, a quia timet injunction will only be

granted if proof is made that the damage is immediate. Otherwise, come back when there's an actual damage, if there's one (could have been prevented). This shows that courts are concerned with liberty: to pre-order something, you need a really good reason – i.e. you need a wrong to get a remedy.

Hooper v. Rogers: shows you can get a quia timet injunction (damages was going to happen sooner or later) even if, here, damages were given in lieu of an injunction because it would have been inadequate (permitted by Lord Cairn's Act). SS suggests that damages here are almost like specific performance (it's the money needed to repair the hill).

Redland Brick: less likely that an injunction be granted if it's mandatory, esp. for quia timet (it would be like infringing the wrong principle and liberty!).

The philosophical problem with quia timet injunctions is that they are about a wrong that hasn't been done yet (so no wrongdoer, so no reason to punish anyone).

II. Mandatory Injunctions: Supervision and Constraint on LibertyII. Mandatory Injunctions: Supervision and Constraint on Liberty

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1. DEFINITION AND PUBLIC POLICYA mandatory injunction is an injunction by which the defendant is forced to do something.

Should he resists, he'll be held in contempt of court. It is a discretionary remedy and courts are reluctant to give such orders, as compelling affirmative action is a major infringement on the liberty of individuals. Courts will prefer damages unless they are totally inappropriate in which case you'll get an injunction (if there's been damage, there'll always be something). Mandatory injunctions are pretty much granted only for nuisance and trespass.

Question: are the courts replicating the rights or are they creating new ones?Answer: it looks like a pure replication (and thus injunctions are like specific performance);

however, one can only speak of replication when an injunction order is made.

2. MANDATORY INJUNCTION AND LIBERTYIn Redland Bricks v. Morris, the plaintiff asked for a mandatory injunction (actually a

mandatory quiat timet), which he didn't get. Lord Upjohn set the following criteria for granting a mandatory injunction: (1) a very strong probability on the facts that grave damages will accrue to him in the future (same for the quia timet part). (2) Inadequacy or insufficiency of damages in case of damage (general principle of equity) (3) cost to defendant (liberty concern); (4) if mandatory injunction is granted, defendant must know exactly as of law and as of fact what to do (same problem in Fletcher v. Bealy).

III. Injunctions to Protect Property InterestsIII. Injunctions to Protect Property Interests1. INTRODUCTION.

Overview: Although courts constantly say that equitable remedies are only available when damages would be inadequate to protect the plaintiff’s rights, when it comes to protecting property rights, it is only in exceptional cases that the plaintiff will be limited to damages: for example, injunctions are almost always available to restrain trespass and nuisance.

2. CHATTELS. If a chattel is unique or has a special value to its owner (such as an heirloom or piece of art),

an injunction will generally be granted. Where the chattel is not unique, the courts in most provinces will grant pre-trial injunctions to restrain the disposition of assets that are the subject matter of litigation. See p. 17.

3. TRESPASS TO LAND.Trespass is the deliberate and unlawful invasion of another person’s property in order to gain

a benefit without the owner’s consent (Goodson v. Richardson). Principle : you get an injunction if you've been trespassed on. The common law has always protected property rights very strongly, which might explain why there is no reluctance to granting mandatory injunctions here –even in the absence of harm17 (usually, in the absence of harm, you'd only get nominal damages, see p. 36). This being said, these injunctions are both mandatory (get out of my land) and negative (never come back) (see Goodson v. Richardson where the court talk of “removing the pipes”, which is mandatory, as “not putting the pipes in”, which is negative!).

17 Can't we construe the mere walking on your land as a violation of your right to have to land remain unviolated? Yes.

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This being said, it is strict liability and as such is sometimes tempered with (Woolertain).

If you are arguing for the plaintiff, you are asserting your erga omnes right. If you are arguing for the defendant, you could plead (1) that the plaintiff was

unreasonable (e.g. for not wanting to let you on his land for minor repairs, as in Woolertain 18) or (2) balance of cost. Then, the injunction will be suspended and the defendant will pay damages or there'd be a forced sale.

Note that Trenberth said that Woolertain was not good law anymore, and that there was no reason not to enforce negative injunctions as soon as they are ordered. If you want to plead Woolertain you could say that equity is always on a case by case basis, or that it was just bad distinguishing (Trenberth: bank + negative; Woolertain: individual + mandatory) .

Question: can we really say injunctions against trespassers replicate the right of the property owner?

Answer: no. Property rights are erga omnes. An injunction is a link of law between two people19. Ejectment (see p. 15) would be erga omne.

4. NUISANCE. 4.1. Introduction

Nuisance is the unreasonable use of your property causing damages to the reasonable enjoyment of another's own property. The level of annoyance is to be asserted considered also public policy and socioeconomic consequences (which explains why it was not granted in Miller v. Jackson or Boomer). If this annoyance involves physical violation of another's property, then it's trespass (it can be both), but if I'm just standing at the end of my field yelling into yours, it's nuisance20. But they are not mutually exclusive categories. Injunction is the remedy, as it was for nuisance, but it's far less common.

The relation to nuisance can be understood in two possible ways: either as an issue of substantive law (what is the nature of nuisance?) or in terms of remedies (if there is a nuisance, what's the remedy)?

Generally, nuisances will be remedies by injunctions. However the cases discussed below are exceptional and utilitarian (“there's a clear nuisance, but there's a good reason for you to tough it out”).

4.2. Nuisance doesn't always guarantee injunction as a remedy

Miller v. Jackson [1977] 3 All E.R. 338, [1977] QB 966 (CA)

18 From Stamp J.: “(1) If the injury to the plaintiff's legal rights is small, (2) And is one which is capable of being estimated in money, (3) And is one which can be adequately compensated by a small money payment, (4) And the case is one in which it would be oppressive to the defendant to grant an injunction: -- then damages in substitution for an injunction may be given.”It's interesting that the suspension is only granted because the defendant recognised he was trespassing (by asking permission, etc.)19 This being said, Planiol and Hoefeld (I really know how to spell it by now) think all property rights are just bilateral personal rights with every other person in the world. 20 Reminds me of the ugly wall. From First-Year Property: «Ton voisin t'emmerde, tu peins ta clôture de la couleur que tu veux, si laide soit-elle.»

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Facts. Cricket has been played in a particular field since 1905. In 1972, a house was built on the adjoining field. The Millers moved in. They have then been attacked by balls from the cricket field (damages to the house and fear). They complained to the Club. The Club agreed to pay the damages, and even put up a extra fence on the already 6-foot tall wall –the structure almost reaching 15 feet. Since balls continued to fall in the garden, the Club offered extra solutions, but the Miller refuse, and went to Court for an injunction and damages for nuisance. Issue. 1. Did the Club creating a nuisance for the Miller? 2. Should the remedy be an injunction?Holding. 1. Yes. 2. No.

Reasoning Is there nuisance? Should injunction be the remedy?Lane Yes.

There is a risk of (physical) injury. o "The evidence makes it clear that the risk of

injury to property at least was both foreseeable and foreseen [R. 359]": it has never been pleaded before because you cannot claim ECO if there is no injury.

Coming to the nuisance (rejected).

Yes. Consequently Lane J. wanted

an injunction but only when the cricket Club will have found somewhere else to play.

Cummings Bruce Yes. Agrees with Lane. There is a nuisance because balls fell like

thunderbolts (i.e. unpredictable).

No. Interest of the public, so the plaintiffs are only granted damages and there is no injunction.

Denning No. Issue of public interesto The utility of the activity is so great that it

cancels out the nuisance. The cricket is a green space (protection of the environment), and it occupies the youth.

Coming to the nuisance.o Cricket had been played for the past so many

years prior to the building of houses (the cows previously there had not been annoyed by the balls). He says that what was not a nuisance before cannot be a nuisance now (today, this has clearly been overruled).

Balancing exercise. o Prioritize the cricket club and rather hard on the

plaintiffs (take the offers or move).

No. Same: interest of the public,

so the plaintiffs are only granted damages and there is no injunction.

Ratio. Where there is nuisance, an injunction may not be granted if the source of the nuisance is a greater good than the rights being infringed on (public utility trumps private annoyance). Comment. SS: this is a bad judgement. Of course, it's a lord Denning judgement. But he says there is no nuisance, and then

says it's not a question of damages [C. 89], so not about injunction (but this is unnecessary if there is no nuisance), and then says the club must grant whatever it offered the family (why grant damages if there is no nuisance?).

Cumming Bruce's judgement is a good illustration of how there isn't always an injunction when there's a nuisance.

The majority seems to be saying that it's an urban planning problem and that the Millers should be suing the city.

4.3. Utilitarian American case lawThe following two cases are famous and controversial American cases (Canadian courts are

most conservative, it's unlikely they'd grant something like that). They are known for their highly utilitarian logic, and thus used a lot by economists. They have a very broad public law approach in the sense that everything can be seen as a sort of tax (so government action): private

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expropriation in Spur Industries v. Del E Webb and a right to pollute in Boomer (permanent damages instead of an injunction, like a servitude).

In Spur, we definitely have the creation of a new right because no wrong was committed. The courts are pretty much giving the owners of adjoining lot the following choice: you can pay to have them move or not do anything. SS thinks they are almost acting like the legislator.

From Boomer: permanent damages (i.e. a forced purchase of a servitude or right to pollute) may be granted where the loss recoverable would be smaller than the cost of removing the nuisance (in social, commercial and economic terms → efficiency). The damages can be seen as a signal of alarm: what you do is wrong enough to punish you, so be careful not to increase your pollution or the balance will be tipped and courts will close you down. This is both an example of discretionary remedialism and or how private law can be used to achieve public law objectives.

From SS's excerpt on “Specific Performance and Injunctions”Certainly it would be inefficient if the work was actually done—it is inefficient to force somebody to use valuable resources in a wasteful manner—but it is not at all certain that granting the decree would actually lead to this result. What probably would have happened is that the parties, or their lawyers, would have discussed the matter and then reached an agreement whereby the specific performance order would be waived in exchange for a payment to the islanders. If the cost of performance was indeed greater than its value, then an agreement in which the sum to be paid was fixed somewhere between the cost and the value of performance would have benefited both parties. Of course, the costs of negotiating such an arrangement will be avoided if the court simply orders damages in the first place. Such costs—termed ‘transactions costs’ by economists—are real costs, and so must be taken into account in determining the efficiency of a legal rule. But there are also costs associated with an order of damages. If the court is required to assess damages, the litigation will be more complex and expensive than if the court simply orders specific performance. Considerations of this kind are relevant even if the matter does not go to court, since contracting parties’ settlement negotiations will be conducted against the background of their estimations of what a court would decide. Furthermore, there is always a danger that an order of damages will underestimate the claimant’s true loss (indeed, this seems likely given certain restrictions on damages awards, as discussed below).

5. FINAL COMMENTS. All these cases involve many controversial assessments that blur the actual ratios. First,

there's a question of discretion: these are all equitable remedies, so courts have a wide discretion; second, there's a lot of economic theory going on (efficiency as a way to deny rights). Finally, these cases are really about property law (substantive law). Remedy is just there to justify a results court view as being better than what the legislator provided for.

Recap – Equity and InjunctionsEquity. Since equity was “created” to remedy the rigidity of the common law, it is very

discretionary. It is also specific where common-law remedies are substitutionary. This explains why they are typically not monetary awards (tough Lord Cairn's Act permitted that damages be granted in lieu of an injunction where it'd prove inadequate; see Hooper v. Rogers).

There are mainly two kinds of specific reliefs: specific performance (contract, unless negative contruactal obligation) and injunctions (the rest).

Injunctions are order to do or not do something. They are meant to prevent harm or stop it. Courts are always more reluctant to order mandatory injunctions (because that would infringe

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on the defendant's liberty) and quia timet injunctions (because no damage has been done yet, so there is no wrongdoer yet). Quia timet injunctions will only be granted where it is proven that damage will occur; if it's not certain, come back when it is (Hooper v. Rogers not Fletcher v. Bealey).

Injunctions are often granted to protect property interests. Of course, ordinary injunctions will be granted against trespassers (Goodson v. Richardson) – the injunction is personal order whereas the property right is erga omnes (so the order doesn't replicate the right). This is also automatic, but this strict liability is sometimes viewed as too strict so courts have, at times, accept to suspend the injunction where the cost is disproportionate to the infringement or where the parties haven't acted reasonably (Woolertain). But not always (Trenberth).

Injunctions are also generally granted in cases of nuisance, though courts might do a balancing exercise (Miller, Boomer, Spur) on an economic efficiency-utilitarian logic. These three exceptional cases all raise the Coase Theorem, i.e. the idea that negotiation can “correct” court orders, that is, give the rights to the party most interested.

C. DC. DIRECTIRECT E ENFORCEMENTNFORCEMENT OFOF AA R RIGHTIGHT

I. Proprietary Right: Getting Your Stuff BackI. Proprietary Right: Getting Your Stuff Back

0. INTRODUCTION. Direct enforcement of a proprietary right is rare in common law. The rule is that you get it

for your land, but not your goods unless it is unique 21 . The absence of equivalent to the Roman law vindication astonishes the civilist lawyers: a thief steals your property, you don't get it back, you just get damages.

1. DELIVERY UP OF GOODS1.1. The rules

Delivery up sounds like a four year old: “this is mine, give it back”. It's the enforcement of a real right through a claim of ownership. To get this remedy on a good there has to be some sort of distinctive feature to it (if you order chairs in a Ikea catalogue and pay for them, yours specifically are not identified), if there isn't you'll only get damages (Cohen v. Roche).

Cohen v. Roche also explains the difference between SP and delivery up: SP is about the contract ; delivery up is about the goods themselves.

1.2. The HistoryFrom Diplock in General and Finance Facilities: “There are important distinctions

between a cause of action in conversion and a cause of action in detinue. The former is a single wrongful act and the cause of action accrues at the date of the conversion; the latter is a continuing cause of action which accrues at the date of the wrongful refusal to deliver up the goods and continues until delivery up of the goods or judgment in the action for detinue. It is important to keep this distinction clear, for confusion sometimes arises from the historical

21 Well, I just rationalised that this was the rule. There might be exceptions, but it works with security law (mortgage over the house but you can only get the value).

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derivation of the action of conversion from detinue sur bailment and detinue sur trover; of which one result is that the same facts may constitute both detinue and conversion.”

Curwen, “DETINUE AND CONVERSION” (2007) [SEE PDF]The common law never developed an effective action fort he recovery of goods, and trying to go

around it created a weird mess between both tort law and property law. Detinue is an ancient action for the recovery of goods: the remedy is an order that the def. return the

goods or pay their full value to the claimant. Today, it seems weird that a proprietary claim give rise to a personal remedy, but Maitland explains that it didn't matter back then because debts were often settled in nature [SS: “Pigs were the currency”].

However, the problem with detinue is that it was subject to the wager of law, which eventually became a license to perjury. This result was undesirable so lawyers dug up the action in trover (now conversion), which was an action in trespass on the case for the conversion of goods ( intentional tort to personal property, where defendant's unjustified willful interference with the chattel deprives plaintiff of possession of such chattel.). [SS: Conversion is suing for the other being on your land and you not being able to use it (so damages for loss)]

However, in the C16, you had to make sure your claim couldn't be framed as a detinue if you wanted conversion. In practice, this meant the plaintiff has to let go of the proprietary claim. This was even “officialised” in Isaack v. Clark where Dodderidge J suggested that a “refusal by the defendant to return he goods was evidence that they has converted them to their own use and thereby changed the property in them”. This was perhaps a little strong theoretically but it enabled the change. Eventually, the rule changed and it was accepted that the plaintiff didn't lose his proprietary interest even if we was asking for payment of the full value.

Of course, conversion was equally inadequate with respect to specific goods. So equity courts barged in, ordering delivery up where necessary. In 1854 common law courts were given similar discretion and started ordering the delivery up of goods where the goods had been unlawfully detained. In 1977, detinue was abolished and replaced by conversion (conversion required intention, now negligence would suffice as it did for detinue).

As a result, defendants could be granted three remedies: (1) delivery up + consequential damages; (2) choice of delivery up or payment of full value + consequential damages; (3) damages. Plaintiff could chose between (2) and (3) and courts had the discretion to grant (1) instead.

The problem of conversion, is that some say it's too proprietary, others, not enough.

2. EJECTMENT (RECOVERY OF LAND)With regard to land, the common law does have a sort of vindicatio, called ejectment.

Ejectment is an order against the whole world (just like property is an erga omnes right). It is granted as of right and cannot be suspended (McPhail).

Strangely, this remedy came from the common law courts (which usually only grant damages), thus showing the strength of the land interest in the common law. Probably because every piece of land is unique 22 . This is arguably the only case in English (common) law where you get the direct enforcement of a proprietary right as proprietary right.

II. Award of a Sum Due Under a ContractII. Award of a Sum Due Under a Contract1. DEBT1.1. Looks like SP but it ain't SP.

22 Though bemol with Semelhago v. Paramadevan, infra pp. 23 and 29.

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For historical reasons (actions in debt historically being considered property claims23), actions in debt are not considered specific performance claims, and they have different procedures. Given that the two main contract claims today are actions in debt and get-out-of-my-land-you're-not-paying-the-rent cases (two proprietary claims), it is completely false to say that damages are the typical remedy for contract.

There is little law on the topic because of the straightforwardness of the claim: if you can prove a valid contractual claim and that you fall within the limitations period, you will get your order.

Smith (STEPHEN), EXCERPT ON “ACTION FOR AN AGREED SUM” FROM ATIYAH’S INTRODUCTION TO THE LAW OF CONTRACT 6TH ED. [R.]

The action for an agreed sum. The victim of the breach of a monetary obligation may bring what is called an ‘action for an agreed sum” (or action in debt), to obtain a specific performance of the monetary obligation. It looks like a damage-order because it's about, but it's about a specific amount of money; however, they are not equivalents because the claimant in damages must prove that the failure to pay caused him a direct loss whereas in an action for an agreed sum, the claimant need only prove that the sum was due and not paid and the procedure is simpler. Note that even if it is an equitable remedy (it is specific performance), it is available as of right and not merely in cases in which damages are an inadequate remedy.

Of course, the claimant must have perform his duties. “You cannot claim remuneration under a contract if you have not earned it; if you are prevented from earning it, your only remedy is in damages”. 24

Note that the possibility of bringing a restitutionary claim for the value of benefits conferred under an incomplete contract also exists where the reason for non-performance is that the contract was frustrated.

All this being said, you should, on top of the order for payment/execution of contract, get damages to failure to pay an agreed sum. However, this rule doesn't seem to be applied.

In a sense, an action in debt is the reverse of the offer and acceptance process. One party stops performing, thus offering the other the end of the contract. The other can either accept it (and get damages if a loss occurred) or continue with the status quo (in the case, the contract). This choice is explained by the general reluctance of courts to give the possibility to one party to unilaterally repudiate the contract (explicit in White and Carter v. McGregor). The mitigation is strangely assessed (White and Carter v. McGregor). See p. 29.

Of course, to get your action in debt, the service must have been performed or the goods delivered.

2. MONETARY OBLIGATIONS AND STIPULATED DAMAGES CLAUSESSmith (STEPHEN), EXCERPT ON “AGREED DAMAGES CLAUSES” FROM ATIYAH’S INTRODUCTION TO THE LAW OF CONTRACT 6TH ED. [R.]

The parties sometimes negotiate what will happen in case of breach of contract. Such agreements are usual valid as long as the clause talks of compensation (“liquidated damages”) and not punishment. If the court thinks that the sum is a penalty, it is not recoverable. The innocent party is then left an ordinary claim for damages to be assessed by the court in the usual way.25

Agreed damages will be classified as liquidated damages (and thus enforceable) only if it is a genuine pre-estimate of the expected loss, an ex ante test. This being said, courts are clearly influenced by the severity of the loss. Common sense principles include: if sum is way higher than worth of probable

23 Say you sold someone a horse, gave it to them and then waited for your money, your claim was not that the person respect his promise, but that you owned the money (as the other person owned the horse). It's like the vindicatio of a fungible!24 Per Lloyd J in The Alaskan Trader [1984] 1 All ER 129 at 134.25 Penal clauses are also found in the list of prima facie suspect clauses in Schedule 2 of the Unfair Terms in Consumer Contracts Regulations 1999; see supra.

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breach, or if it's always the same no matter the breach, if the payment delay is very short, it's prima facie a penalty.

The rule against penalties is an old equitable principle. However, some people claim that it's an infringement of the freedom of contract, or that it may hinder business practises26

Courts however continue to look at them closely because people don't really pay attention to these clauses. In ECGD v. Universal Oil Products Co.27 the House of Lords insisted that the penalty rule is only applicable to a sum of money payable on a breach of contract, and has no application to a contractual clause which provides for an agreed sum to be paid on any other contingency. In this case the claimants only sought to recover their actual losses, so the actual claim was unobjectionable; but the defendants argued that, if the clauses in question were enforceable, there might be other circumstances in which sums vastly in excess of the claimants’ losses could be recovered. It's a little formalistic.

Is the part on forfeiture important?

Stipulated damages clauses are clauses by which the parties try to guess what their loss will be and what compensation they'll want. It's pretty much trying to create your own remedies law. Many argue that these clauses are based on a economic efficiency theory (see p. 11, 24): if it would cost you most to hire more workers to finish on time than it would to finish late and a pay a fine, efficiency for you dictates that you be late (though some have argued it's only efficient to the breachor: the breachee could want to free-ride by making the breach look attractive to the other party, which is inefficient and undermine the point of contract).

One could also argue some self-imposed penal clauses (thirty minutes delivery or its free) are there to show one's trustworthiness.

The courts have a long tradition of not enforcing clauses where they are disproportionate to the damages 28 , esp. given that people usually don’t think about defaulting when they sign a contract (they are performance-minded, and it's hard to really asses the consequences of something you don't think will happen, element less looked at than, say, price).

Some have argued that the courts ought to show more deference to the pacta sunt servanda29, but the court's interventions are not just about fairness, they are also about the fact that you can only stipulate your rights, not your remedies (see three kinds of order p. 4).

o Penal Clauses (invalid): stipulate an amount which is greater than the expected loss; and

o Liquidated Damages Clauses (valid): stipulate an amount which is not greater than the expected loss.

Test: look at the clause at the time it was stipulated (ex ante, not in retrospect) and see what was expected back then, regardless what the loss actually turned out to be. This means that even if it turns out that the stipulated loss was, at the time of stipulation, far greater than the expected loss, then even if at the time of trial it is far less than the actual loss, it is still invalid.

Sub-Rules: the courts have established several sub-rules beneath the basic distinction mentioned above:

o Multiple Penalties: If the K says you have a pay a certain (but different) damages amount for every single breach (i.e. if you breach any one of a series of

26 Such as the common practice whereby pizza-delivery companies promise a free pizza if delivery is even one minute late, offered as a proof of the business's trustworthiness. 27 [1983] 1 WLR 399.28 On a comparative point of view, even if civil law courts are keener on SP, they have also barred disproportionate clauses under the doctrine of abusive clauses.29 Though SS thinks they are pretty deferent.

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obligations), then the court will presume that each breach in actual fact involves a different actual loss and that this is thus a penal clause (i.e. doesn’t correspond to actual expected losses).

Note: in obiter in Elsley, the court specifies that when the same amount is designated as stipulated damages for each in a series of obligations, they will be considered penalty clauses; but, if the a different amount is designated for each, they will be considered liquidated damages clauses.

o Commercial Parties: If the co-Kants are sophisticated commercial parties, then there’s a presumption that it’s not a penal clause b/c we presume these parties know what they’re doing (see Philips).

o SP: if there is a stipulated damages clause, the court might still grant an injunction to enforce specific performance of the obligations (see Elsley).

But doesn’t that mean the victim might be paid twice, since they would get the stipulated damages and SP? Prof says he has no answer to this Q.

Recap – Direct Enforcement of a Right: Proprietary ClaimsDelivery Up. Today. Direct enforcement of a proprietary right is rare in common law. The

rule is that you get it for your land, but not your goods unless it is unique. Unique goods entail lead to a claim for delivery up (Cohen v. Roche, Falcke v. Grey) while unique land (and land was always unique until Semelhago –and so unique it was a “SP” common law order) leads to a claim in ejectment (McPhail).

Detinue and Conversion. Detinue, which was a proprietary claim for the recovery of goods, has been replaced by conversion, which is the tort of unjustified interference with the plaintiff's goods (loss in not being able to use it). As a result, defendants could be granted three remedies: (1) delivery up + consequential damages; (2) choice of delivery up or payment of full value + consequential damages; (3) damages. Plaintiff could chose between (2) and (3) and courts had the discretion to grant (1) instead.

Actions in debt (or award of a Sum Due Under a Contract) have historically been treated as proprietary claims: if the plaintiff has paid, he has the choice of rescinding the contract and asking for damages for the loss or keeping it “alive” and asking damages for breach (White and Carter v. McGregor). Parties will often pre-assess the damages they'll incur in case of breach. These stipulated damages clauses are looked suspiciously by the courts (because it's like contracting-out of the common law; and also because people usually consider performing their contract when they sign it, so the meeting of the mind is not as clear as it is, for instance, on the price element). However, the common law is also a law merchant, which entails an element of efficiency, so if the stipulated damages are not disproportionate, they will be enforced (this is in tone with the efficient breach theory).

III. Specific PerformanceIII. Specific Performance

1. INTRODUCTIONLike injunctions (see p. 12), specific performance is an equitable remedy, which means it's

discretionary and that it should only be granted where common law remedies are inadequate30 (or rather, where an equitable remedy is more adequate than a common law one (Beswick)). Specific

30 Where money wouldn't enable the plaintiff to get his performance otherwise.

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performance is a court order compelling the defendant to carry out his contractual obligations. Again, for question of liberty (see p. 13), courts have consistently refused to enforce personal positive obligations (though they have accepted negative obligations that amounted to the same thing in practice, see Nelson).

Smith (STEPHEN), EXCERPT ON “SPECIFIC PERFORMANCE AND INJUNCTIONS” FROM ATIYAH’S INTRODUCTION TO THE LAW OF CONTRACT 6TH ED. [R.]

The traditional rule is to the effect that you can't force SP, even if there's a breach of contract, but must rest content with monetary compensation.31 SP (positive obligation) or injunction (refrain from something) will indeed be granted only where damages would be an inadequate remedy (which fits with the fact that they are discretionary equity products that cannot be claimed as of right –and that can also be subject to the equitable bar/clean-hands doctrine). «For instance, specific performance is granted virtually as a matter of course for the enforcement of contracts for the purchase and sale (or lease) of land and buildings (though one modern case32 shows that the old discretion to refuse specific performance on grounds of personal hardship remains alive). Similarly, injunctions to enforce negative covenants, such as post-employment non-competition covenants, are regularly awarded, though here too the equitable bars may be raised in an appropriate case.33 On the other hand, specific performance is never granted to enforce performance of a contract for the sale of ‘fungible’ goods—goods that are readily obtainable elsewhere.»

SP remedies are available under three conditions:(1) only if damages are inadequate, e.g. contract for the sale of something unique because the

plaintiff has a right to what was promised under the contract and that this can only be granted by the plaintiff. This means that the damages otherwise granted do not seek to compensate but rather to have the plaintiff get the wanted performance out of a third party (even if the common law doesn't explicitly acknowledge this). «By definition, giving the victim funds to enter an identical contract with someone else (plus an amount to cover incidental expenses) ensures that she is left as well-off at the end of the day as if the original contract had been performed.»34

This being said, there is a tendency to expand the concept of "adequacy": see Beswick. (2) they will not be granted for contracts involving personal service (e.g. portrait painting or

contract of employment) because that would be akin to slavery. However, contracts not to do are often enforced by means of an injunction (unless this injunction would offer the defendant little choice but do it, e.g., work for me or starve).

This being said, does the personal liberty argument still holds against corporations or employers. Cases were the employee's self-esteem or integrity are at stake with the job might not ever be adequately compensated by a mere award of money.

31 Unlike some civilian legal systems, English law has not traditionally permitted the victim of a contract breach to choose, by way of remedy, to pay a reduced price for defective goods or services: the victim’s choices are limited to damages, specific performance, or (if the breach is serious) to refusing the goods or performance and demanding the return of the entire price (if it is has already been paid). Under Part 5A of the Sale of Goods Act 1979 (implementing Directive 19994/44 of the European Parliament), however, a consumer is now given the choice of requiring a seller of defective good to reduce the price by an appropriate amount.32 Patel v. Ali [1984] 1 All ER 978.33 In Shell v. Lostock Garage [1976] 1 WLR 1187 the Court of Appeal refused an injunction to restrain the defendant from buying petrol from other suppliers in breach of its contract with Shell. The reason for the refusal was that Shell was supplying other rival petrol stations with petrol at much lower prices, with the consequence that the defendant was unable to resell the petrol Shell sold him.34 In Sky Petroleum v. VIP Petroleum Ltd, [1974] 1 WLR 576. the courts granted a decree of specific performance of a contract to supply petroleum. The dispute arose during an oil crisis, and the court suggested that an order of specific performance was appropriate as it was not clear that the claimant could obtain alternative supplies at any price. But it seems clear that anyone willing to pay £1,000,000 a barrel would have had no difficulty obtaining all the oil he wanted. The real difficulty, it appears, was that oil prices were rising and falling so dramatically and unpredictably that it was impossible for the court to determine the appropriate level of compensation.

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(3) courts only grant SP when they are certain it'll be executed. Of course, it's hard to supervise specific relief (by supervise, we mean, not have to make many other orders35)

This being said: should specific relief be more widely available? I mean, don't parties have an obligation to perform? Yes, but what about having lost confidence in the order party (or courts proceedings having taken so much time it's too late for specific performance)? Maybe the answer is simply historical: as a Chancery remedy, it is considered a secondary remedy. But North-American authors like to take the view of the economic efficiency. «According to the theory of “efficient breach” […], SP is not routinely available because there are cases in which it is efficient for contracting parties not to perform their contract36.» [See notes]

«The common law’s view that specific performance is presumptively a secondary remedy arguably makes it too easy for courts to refuse such orders. At present, the party seeking specific performance has the burden of proving that damages are inadequate.» One of the downside of this is that courts don't recognise subjective (that is, non pecuniary losses).

2. NON-PERSONAL OBLIGATIONS2.1. Non-personal obligations with regard to property2.1.1. Sale of Goods

The general idea is that if the good is unique (Falcke), money won't buy you a replacement for what you were promised (substitute damages are thus inadequate).Since to get SP, you must show that damages would be inadequate, why are damages inadequate in cases of unique goods? Because (1) money cannot by what you want; (2) money cannot compensate you for your loss.

These cases don't fit very well in the economic theory (i.e. if cost of performance exceeds its value, there will be an incentive to breach), because the value of unique goods cannot be assessed (it's idiosyncratic), thus making SP easier to assess than damages. See p. 17.

Falcke is a bad example because there could have been SP had there not been an equitable bar (akin to unreasonable behaviour). From this case, we also get that: third parties with notice must pay up.

Note that the Ontario Sale of Goods Act (1990) stipulated that breaches of contract for the sale of certain goods will give the courts the possibility of granting SP regardless of the adequacy of damages.

2.1.2. Sale of land. Given that land is traditionally considered unique to the extent that even common law courts

can enforce directly these rights, one would have thought that they'd be the ultimate unique good (see p. 18). But then came the weird Supreme Court case of Semelhago where the court said that

35 In Argyll Stores, f.ex., a court refused to grant a shopping center owner an order that would have obliged the owner of a supermarket to stay open at certain hours. 36 Case at hand: Tito v. Waddell (No. 2). The defendants were liable under some contracts which required them to restore the condition of the claimants’ land (on an island in the Pacific Ocean) after it had been exploited for phosphates. In fact they left the land in a deplorable state, but it was proved that the cost of actual restoration would have been enormous—it would have involved shipping loads of soil from Australia—and would have far exceeded the value which the land would have after restoration. For reasons unrelated to the mining, the island had become uninhabitable—the islanders were forced to relocate—with the result that replanting would have been of little value to them or anyone else. In these circumstances, the court refused to award specific performance. The result appears to support the arguments of the efficient breach theory. Assuming the court had the facts correct, restoring the island to its original state would have been hugely wasteful. Had the islanders simply been given a sum of money equivalent to the cost of restoration (which did not happen, for reasons explained below), it seems clear that they would not have used it for this purpose. They would have used the money for something on which they placed a higher value.

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land was like any other good and that it was up to the plaintiff to prove that it was unique (and the threshold is set pretty high and it's not very clear). The traditional rule is completely reversed. Semelhago also raises a problem as to mitigation: the plaintiff thought it was unique so he didn't mitigate by looking for another house – if the plaintiff starts looking right away for another house, it will disprove the unicity of the one they are in court for, it they don't, they'll be blame for not having mitigated? Opportunity to speculate!

2.2 Non-proprietary Non-Personal Obligations ‘To Do’The general rule is that there will be no SP for a contract to do something, unless damages

would really not be adequate (as in Tanenbaum). The Courts usually invoke that it'll be hard to supervise the actual compliance with the order

(Argyll). Also, granting damages will usually enable the plaintiff to get the work done by a third party (see cost of cure p. 27).

3. PERSONAL OBLIGATIONSThe historical reluctance with the enforcement of personal obligation takes root in the court's

concern with undue restriction of freedom. As a result, personal obligations to do are usually not enforced (Lumley couldn't force Wagner to sign; or Warner Brothers couldn't for Bette Davis to play in their film) but negative obligations most often will (but the court could prevent Wagner and Davis from signing and signing elsewhere).

It is true that the parties have signed a contract but the courts, i.e. the State, will never enforce a positive SP in a personal obligation contract, the symbolism is just too strong (think feudalism).

Historically, France had the same problem, but for another reason (well, the liberty was a problem after the French Revolution), an institutional reason: the civilist tribunals are not law-maker and forcing people to work is forcing a law (a contract, the law of the parties) on them. Courts could only order a payment of money. And then they got wise and created the astreinte: pay a huge sum or perform, as you wish, effectively, it's in the end rather forcing a person to perform).

There is less reluctance with the prohibitions because they don't forbid you from doing other things (Bette Davis could have worked as a waitress). Unless they are excessive (i.e. leave you no choice, or force you to starve, in which case they become akin to a personal servitude), such obligations will be enforced.

Also, remember that here, the SP of a contract is called an injunction ( see p. 9 ) and injunctions are granted where damages are inadequate, and it is hard to assess the worth of the breach of a covenant in advance (WB probably wouldn't care about Bette Davis going to some independent Connecticut firm, another story with MGM).

4. THEORIES OF SPECIFIC PERFORMANCE: HOW TO TIE ALL THIS.First theory: nothing explains this except history.

The second theory is that of economic efficiency/utilitarian explanation. The idea is always that people should be able to get rid of inefficient contract. If the cost of performance (i.e. SP) is less than damages for breach, the contract will be performed. Consequently, SP should always only be a secondary remedy so as to give an incentive for breach of inefficient contract.

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SS thinks there are two flaws: (1) one is that an SP order will often entail negotiations rather than actual SP (see p. 11) –having to go to court to get the bargain going is not very efficient37; (2) the other is a moral: signing the contract meant agreeing to perform not to efficiently perform; also, if getting out of inefficient contract was acceptable, court wouldn't characterise efficient breachors as wrongdoers, and if they didn't characterize them as wrongdoers, they'd be punishing innocent people. Though the punishment of innocent is something economic theory doesn't care much about, law is about justice, not efficiency.

The third theory, and SS's view, is the institutional explanation38: there is always a duty to perform your contracts but courts often decline to enforce this duty and give an alternative remedy for the breach, for questions of institutional cost: (1) restrictive covenants are easier to supervise, so they are ok, and (2) damages are less intrusive of the law-institution than damages, and that explains why courts have no problem with monetary SP.

Recap – Specific PerformanceLike injunctions (see p. 12), specific performance is an equitable remedy, which means it's

discretionary and that it should only be granted where it is more adequate than a common law remedy (Beswick, Tanenbaum). Again, for question of liberty, courts have consistently refused to enforce in personam positive obligations (Lumley v. Wagner; though they have accepted negative obligations that amounted to the same thing in practice, see Nelson). Courts often invoke the difficulty of supervision to refuse SP (Argyll).

Some people say nothing links specific performance rules, except history. Others say it's the economic efficiency theory: people should be able to get rid of inefficient contract: this means SP should always only be a secondary remedy so as to give an incentive for breach of inefficient contract. The third theory (SS's) is that there is always a duty to perform your contracts but courts often decline to enforce this duty and give an alternative remedy for the breach, for questions of institutional cost.

IV. Equitable Defences (Maxims of Equity)IV. Equitable Defences (Maxims of Equity)

0. WHY SUCH DEFENCES?Equitable defences are invoked by the defendant (or ex officio by the court) to avoid an SP

order. You'll still have to pay damages, usually. This alternative the courts are creating is a way for them to give effect to some public policy

concerns (after all, as you really should know by now, equity courts are courts of conscience). Of course, it's always discretionary.

Note that the action in debt is a common law order, which means equitable defences will not work against it.

1. EQUITY WILL NOT AID A VOLUNTEERA volunteer is old common law parlance for someone who hasn't paid for their rights. If you

haven't given consideration for what you claim is yours, courts won't grant you SP (but you can 37 Plus, since on an economic point of view damages are there to send a signal about future behaviour and not correcting past wrongs, it's hard to assess when it's efficient (studies go both ways). 38 For lack of a better word.

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ask for damages) (Riches v. Burns) This doctrine is mostly used for tracing (a volunteer is the opposite of a good-faith purchaser for value), pretty useless for nuisance or trespass.

This rule is historically founded in the sense that the common law is a law merchant, which entails a certain reluctance towards gratuitous transactions but it is awkward to say that a right that is otherwise perfectly valid would be weaker.

2. LACK OF MUTUALITYIf one side can't get SP, the other side shouldn't either. While this doctrine seems to makes

sense, it's rarely applied in practice, because there's always another reason. Want of mutuality is merely a factor which the court of equity may have to consider in deciding whether or not to grant a decree of specific performance. It is not an absolute bar to specific performance (Price v. Strange).

3. CLEAN HANDS DOCTRINEA person who has acted wrongly, either morally or legally will not be helped by a court when

complaining about the actions of someone else. Sometimes, the clean-hands doctrine is a little like good faith ( Falcke ) or public policy. A people example would the volage Duchess of Argyll trying to prevent her equally

adulterous husband from publishing a book about their sex life (or the opposite). The court said it wouldn't do anything because they had equally dirty hands.

Clearly enunciated in the Denning judgement in the McPhail squatter case; equity is a conscience court, so it makes sense that you not get something because you're a wrongdoer yourself. This being said, McPhail was an ejectment case, i.e. an erga omnes remedy, so perhaps it wasn't necessary to mention clean hands at all39.

Traditionally, this doctrine was usually used in misrepresentation cases: A wants to buy company B. B makes a misrepresentation. A still wants to buy it. Then A changes its mind. B asks for SP. B won't get it because its misrepresentation dirtied its hands. Careful today because misrepresentation-dirty-hands cases were all decided before Hedley Byrne, a case which created the tort of misrepresentation (so is the clean hands doctrine still useful?).

4. LATCHES. Latches are delay and originated in the equity courts prior to the implementation of

limitations and prescription: a plaintiff will be barred from his claim if he takes an unreasonably long time to assert it (Cadbury Schweppes Inc. v. FBI Foods Ltd).

Today, there are statutory limitations but they didn't displace the equitable latches.

5. UNFAIRNESS AND HARDSHIPTechnically different; often encompassed in hardship. There is unfairness where the contract

itself is unfair (as in Falcke40). Not a contract under duress (it would be invalid), but say unconscionable yet valid41. Hardship is where unfairness would arise of the court order (as in Patel v. Ali). There has usually been some sort of intervening act.

39 But weren't clean hands just invoked to refuse the squatter's demand for time to pack up?40 The problem with Falcke is that it can be explained by both the clean hands doctrine, which is about not liking the plaintiff, and unfairness, which is about being sympathetic to the defendant. 41 It probably isn't really possible for an unconscionable contract to be valid in Canadian law, but it certainly is in English law.

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Recap – Equitable DefencesEquitable defences are invoked by the defendant to avoid an SP order. They convert the SP

order into a damage award. The bars are as follows: Equity Will Not Aid a Volunteer (Riches v. Burns) Lack of Mutuality (not an absolute bar; rare; Price v. Strange) Clean Hands Doctrine (akin to good-faith or public policy; Falcke, McPhail). Latches (equity delays in the absence of statutory limitations; Cadbury Schweppes). Unfairness (the contract is unfair; Falcke)and Hardship (the remedy would be unfair; Patel)

D. D. MMONETARYONETARY R RELIEFELIEF (D (DAMAGESAMAGES))

I. Common-Law DamagesI. Common-Law Damages

1. WHAT ARE DAMAGES?1.1. Un gros fourre-tout.

Damages are an under-discussed topic. What is certain is that they are, traditionally at least, made by common law courts (exception with Lord Cairn's Act). They are monetary orders (but not all monetary orders are orders for damages: the action in debt is considered SP) made in response to a wrong (but again, so is an order to pay a debt42) to compensate the plaintiff (but this is not true for punitive damages and probably not either for pain and suffering/loss of enjoyment awards).

Point is, they are really hard to categorise and are used à toutes les sauces.

1.2. What do we mean by “compensation?”Compensation is trying to give you an amount of money that would make you indifferent

to the breach of contract or the tort (more or less43): if my breaching our contract made you lose a $10 profit, I will be ordered to compensate this loss by giving you $10.

It is not clear whether this compensation order is replicating the defendant's duty (it is the case in Roman law), or if it's creating something new which would create a duty to compensate (in that sense, all remedies are SP). This second hypothesis is supported by the fact that traditional damage orders were almost arbitrary, so a defendant couldn't have guessed the amount of the compensation owed to the plaintiff (and paid him before going to court). Also (see p. 4), if damage orders were only replication of duties, you wouldn't need a law of remedies, the substantive law would suffice (and indeed it does on the Romanist scheme: the whole of tort law is about damages44).

2. COST OF CURE 2.0. Introduction: What is Cost of Cure? How is it not the same as damages?

Cost of cure is not exactly the same as compensation, though they can easily be mixed up. Cost of cure is the cost of replacement (removal of the loss), it's an objective amount; compensation for loss is the amount that leaves you indifferent, it has a subjective component,

42 Though you could argue that as SP it is not a response to the wrong. 43 Easy to understand with loss of profit damages.44 SS thinks it can't be applied to the common law because it would make the duty of care general.

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mitigated by reasonableness (Darbishire). You often have a little bit of both (Liesbosh has both a cost of cure element (the moor is replaced) and a compensation element (for the disturbance)).

Cost of cure is about the cost, compensation is about the value (you might not care much about your old house [low value] but get insurance nonetheless [high cost] (± Harbutt's); seeing a loved one die might mean a lot to your [high value] but he can't be replaced [low cost]). It is easy to mistake cost of cure with compensation, because often the value is the cost (individuals think like this and the courts have assessed damages like this, see p. 42).

K. Dore & E. Veitch summed up the law relating to choice between difference in value and cost of reinstatement with 4 principles: (1) If the cost of replacement is the same as the difference in value, there’s no issue; (2) if the cost is less than market value, then damages are measured by cost; (3) if the cost is more than market value, and no reasonable person in the victim’s position would incur the cost, then damages are measured by market value (Darbishire; Ruxley); (4) if the cost is more than market value, and a reasonable person would incur the cost, then damages are measured by the cost (Harbutt's)45.

Discussion: what do we think of a cost of replacement bright-line? Courts can't know there's a sentimental price. Why couldn't we have some sort of thin-skulled

property rule: you take your property as you find it? This is far from the patrimony of the civil law, which is more like a big balance sheet (cost

not value). The courts didn't give Ruxley his money because they thought it was unreasonable and that

he was unlikely to really build a new pool. Couldn't he have given an undertaking to that effect?o Fear of hardship. o Fear of giving the plaintiff a bargaining chip for private arrangements.

2.1. Cost of Cure for Breach of ContractWhere the claimant incurs costs as a result of the defendant’s failure to perform, the

claimant is entitled to recover the costs for having a third party performing the work or the service. This is known as the cost of cure. The costs of seeing the contract through by another party therefore are recoverable, and may form a significant part of the damages award, except where the costs are disproportionate or unreasonable in the circumstances (Ruxley), performance has become impossible or the claimant has failed to mitigate its loss (contra Harbutt’s).

2.2. Cost of cure For Damage, Destruction, or Loss of Property The cost of repairing in Darbishire is akin to a specific relief because we are trying to

eradicate the loss (substionary specific relief). But if it's too big, it would be like hardship. Same in Ruxley.

In Harbutt's Lord Denning said that one may replace destroyed old property with new one and be fully compensated only if he has no choice but to go to new property; (2) doesn't add extras; (3) does so to mitigate its losses.

As for GFF, before the rules were changed by legislation, hire-purchase gave you a strong right than a security because the “lender” was still the owner, so he didn't need to register his right and took precedence over the other creditors. The traditional problem

45 From Linda Garvey's summary.

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was that of “borrowers” selling the property that wasn't theirs. Then “lenders” would ask both for restitution from the person in whose hand their property was and damages from the hirer. See delivery up p. 17.

3. MITIGATION, TIMING AND REMOTENESS: IT'S A MESS3.1. Mitigation

The general nature of the damages that must be foreseeable, not the specific problem (H. Parsons Livestock, guy shot while on tractor46).

Mitigation is the lessening of the damages incurred where damages are asked for (see p. 19). In other words, you can't claim for loss you could have avoided. There is no duty to mitigate with regard to specific performance (exception of Asamera).

SS thinks it's weird to owe a duty to someone who has hurt you. SS also thinks this is less about remedies and more about duties that arise out of general obligations. And SS's proof for this is that very often, where the same situation gives rise to a contractual and an extracontractual action, we will speak of remoteness for the tort action but of the duty to mitigate for the action in contract! Lord Denning notes that there is debate as to the nature of the test of remoteness in tort and contracts action. People say that more is given for Xk, but Denning says it's not that the test are difference, it's just that the assessment of economic (mostly k) and non economic losses (mostly Xk) are difference. Some people think it's rather about the nature of the duty: where there was no prior relation, the compensation will be greater; because if you knew the other party, you should have been careful (historically, those who chose to rely has no recourse – this is very common law-y). Also, intentional wrongs relax the remoteness rule (that's clearly normative). It's not supposed to be the case in contract (though case law tends to show the contrary), it's certain in tort law.

This being said, SS is not ready to accept it's a full duty because if it were, should the plaintiff not mitigate where he should have, he would be in breach of his duty, which means the defendant could in turn ask for damages.

In practise, damages are assessed on the basis of what a reasonable person would have incurred (with or without mitigation depending on the nature of the breach). So the courts don't really care whether you have mitigated or not: they assess what damages you should get, and only afterwards do they look at the loss you actually incurred. If there it it's higher, tough luck, you should have mitigated, if it's lower, you can only claim what you've lost (see language of Asamera). It's tricky, it's an incentive to mitigate, but not too much (see White and McGregor, Semelhago). Example: your shipper cancels, you can either find another shipper (reasonable action) or, since it's three times the price, ship it yourself, but in the latter case, you won't get more than what it costs you to deliver it yourself. If you don't do anything and go out of business, you will only get compensation for three times the price of delivery. That's an incentive not to do too much.

3.2. Timing Issues: when are damages assessed?3.2.1. General rule: at the time of breach46 Employees are not supposed to ride on the back of tractor. Usually, it's so they don't fall and get hurt. But one employee was riding there and got shot by a hunter. The employee tried to sue his employer for not having made sure he wouldn't get hurt. No. It's not reasonable, it's not likely. SS: it's not about that, it's about deep moral sense. But this cannot be applied in a mechanical way. So it's hard. Whether it's for fairness or economic reasons, it's a judgement of value.

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Timing is only an issue where the value has fluctuated between the time of the breach and the time of the court order, so it's only an issue for damages (or substitutionary SP), not SP (Wroth). The general rule is that damages will be assessed at the date of breach (CASE?), most probably on the view that the duty to compensate arises immediately at the time of the breach, and is violated until the defendant pays up, which usually only happens after a court order. Given that this delay may increase the injury, courts will sometimes modify the rule and assess damages are the date of trial: Johnston (and Asamera for Canadian Law) or Wroth. These problems are relatively new because there wasn't much inflation in the 14th century.

SS thinks the rule should be that damages will be assessed at the time where performance of the duty is not legally required or not possible anymore 47 . In cases of lost goods, damages will be assessed at the time of the breach (regular rule); in cases where the plaintiff decides to rescind the contract after having waited for performance, at the time of the rescission (Johnston); in cases of SP –whether substitute of not–, at the time of the court order because until then, the plaintiff could have expected performance (Wroth).

However, the courts don't always do that for fear plaintiffs will speculate at the expense of the defendant by choosing when to go to court (abuse of right/court's procedure). SS thinks this speculation problem could be “wiped away” with a sort of good faith test, but we know the common law prefers bright-line rules, esp. in commercial issues.

3.2.2. ExceptionsWhere damages are granted in lieu of specific performance (substitute SP as per Lord

Cairn's Act), they should be assessed at the time the SP would have been granted (i.e. at the time of trial): Wroth.

Question: with the fusion, does Wroth also change the rule for common law damages? Johnston seems to be saying they are the same.

Since asking for SP makes you “keep the contract alive” despite non performance, where performance becomes impossible, you should be able to decide to terminate the contract, and that termination will “crystallise” the amount of damages: Johnston.

Asamera uses the language of mitigation, but determining at what point a plaintiff should mitigate is deciding at what point damages should be assessed (since the assessment of damages is a step independent of the mitigation). SS thinks timing issues only arise where one is talking about the cost of substitute performance: it is not common law damages that were granted here, rather substitute SP.

The problem in Asamera is that by introduction an idea of mitigation, it is confusing compensatory damages (common law; for which there is mitigation) with substitute SP (where there should be no mitigation since you are expecting SP): on the one hand, the court wanted to give money to buy replacement shares (so SP), on the other, it's trying to compensate them for having lost the opportunity to resell the shares at profit. Mitigating a loss makes sense, but you can't mitigate what you are being denied. SS says substitute SP was much more advantageous: compensation would only have given Baud the original price of shares (that's what he lost by not

47 SS doesn't like the time-of-breach rule: for him, the assessment should be made at the time the duty to pay is extinguished as to not disadvantage a plaintiff asking for damages instead of cost of cure (which is assessed at the time of extinction because where a would-be plaintiff is still waiting for performance, he obviously can't yet be under a duty to get the performance from someone else).

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having then), so 29¢. However, if Baud wanted to hold these shares today (substitute SP), he'd then have to pay 45$ -and that would be the amount of substitutionary damages).

Substitute SP vs. Compensation: the former in this case would involve giving the victim enough money to allow them to buy the P (they would get the rise in value). But in property cases, it’s more difficult to do this b /c each property is unique. The latter in this case would give 7500 and interest (but in this case we’re trying to get the substitute).

The traditional rule wrt assessment of damages used to be the time of breach, but Tyler demonstrates there have been many exceptions to this rule: in situations of a rise in P value, damages will be assessed at the time of trial.

o There have been so many exceptions that they have replaced the traditional rule: e.g. change in currency rates.

o Where there are subsequent events that change the valuation of the loss (e.g. new medical injury makes a disease less serious than was thought at time of breach), it is dealt with by rules on remoteness: if at the time of the injury something was foreseeable, then it’s recoverable. If the subsequent event is unforeseeable and makes matters worse for the ptf, then recovery will be limited; but if it makes matters better, then the ptf will get less than they otherwise would have.

o What if fresh evidence appears at the appellate level? Treated as a matter of procedure. Where there’s uncertainty at trial, and the judge makes a prediction, then you can’t introduce new evidence (e.g. 50% chance he’ll lose his leg, and by the time the court reaches the SCC he’s lost his leg, you measure damages according to the prediction rather than what came to be).

Recap – Common Law DamagesTraditional common law damages are monetary orders made in response to a wrong to

compensate the plaintiff. Compensation is trying to give you an amount of money that would make you indifferent to the loss incurred (compensating the value). It is different from cost of cure, which is about the removal of the loss, the buying a replacement property/having a third party perform the contract. Cost of cure is more object, compensation more subjective. They can be mixed (Liesbosh) and there is an element of reasonableness involved (Darbishire, Ruxley). They often correspond, but not always and that's permitted (Harbutt's).

As for the assessment of the loss, the traditional rule is that a problem must be foreseeable, not the specific problem incurred by the plaintiff (H. Parsons Livestock). Courts will only compensate a plaintiff for reasonable damages incurred. In practise, this means he has to mitigate his losses (Semelhago).

Generally, damages will be assessed at the time of the breach, probably on the view that the duty to compensate arises immediately at the time of the breach. However, recently, case law has suggested that damages could be assessed at another moment (the rules aren't so clear, the courts are afraid people will speculate). This rule also applies to equity-damages (Wroth, Asamera), tough it doesn't apply to SP awards (you can't mitigate what you are being denied!)

SS thinks the rule should be that damages will be assessed at the time where performance of the duty is not legally required or not possible anymore: in cases of lost goods, damages will be assessed at the time of the breach (regular rule); in cases where the plaintiff decides to rescind the contract after having waited for performance, at the time of the rescission (Johnston); in

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cases of SP –whether substitute of not–, at the time of the court order because until then, the plaintiff could have expected performance (Wroth).

II. Equitable Damages: When Equity Gives MoneyII. Equitable Damages: When Equity Gives Money

1. EQUITABLE DAMAGES (DAMAGES UNDER LORD CAIRN'S ACT)

Lord Cairns’ Act, (1858) 21 & 22 Vict. C. 272. In all cases in which the Court of Chancery has jurisdiction to entertain an Application for an Injunction against a Breach of any Covenant, Contract or Agreement, or against the Commission of Continuance of any wrongful Act, or for the specific Performance of any Covenant, Contract, or Agreement, it shall be lawful for the same Court, if it shall think fit, to award Damages to the Party injured, either in addition to or in substitution for such Injunction or specific Performance, and such Damages may be assessed in such manner as the Court shall direct.

We've talked about it already (see pp. 13, 27 and 29; Wroth, Redland Bricks, Miller, Boomer, Price v. Strange). Traditionally, monetary awards were only granted by common law courts and specific performance by courts of equity. Lord Cairn's Act was introduced as a procedural device: where a plaintiff had a right, but where SP was not adequate, the courts of equity will be able to transform SP into a monetary award (i.e. the plaintiff will not have to go to a common law court to have his right enforced monetarily48).

Question: with the fusion, does Wroth also change the rule for common law damages? Johnston seems to be saying they are the same.

2. DAMAGES FOR EQUITABLE WRONG: “EQUITABLE COMPENSATION”2.1. General Principles (with luck)

“Equitable compensation” are damages for an equitable wrong , i.e. they arise out of a breach of equitable duties (duties on which the common law has no power), such as confidence, trust, fiduciary duties. 49. This is novel in the sense that equity has always been more focused on specific relief. From here, you can either argue that nothing says that putting the plaintiff back in his original position entails not giving him money, or, like SS, that it's like substitute specific relief. Some people say, it's not called damages just because it's a court of equity (that would be Stevenson J.'s opinion in Canson). But truly, it appears that courts of equity tried not to give the plaintiff compensation in an ordinary sense but give him a sum that was exactly what was necessary the value of the trust property – that's not damages, that's cost of cure.

One of the rare things clear from Canson, in which LaForest wrote:I shall begin by attempting to describe the nature of compensation and, more particularly, what it means in the present context.  The appellants strongly emphasized that the courts of equity had, before the Judicature Act, no power to award damages, this being the exclusive domain of the common law, and the only statutory change to this regime was made by Lord Cairn's Act and its successors. Equity, they assert, was concerned with restoring a plaintiff to the position he or she was in before the breach of duty calling upon equity's intervention. The situation, they argued, was not changed by the Judicature Act, which was aimed largely at providing for the enforcement of law and equity in the same courts, not in altering the jurisdiction exercisable under each system.

48 At the beginning, it wasn't a problem because to have the right to go to a court of equity, you had to go through the common law courts first; but eventually, you could go to the courts of equity directly and there problems arose. Also, it could make a difference for quia timet injunctions, where common law courts cannot grant you anything as no wrong has been committed yet. 49 Canada is a frontrunner in these matters.

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There can be little doubt that damages come within the province of the common law […], although some early transgressions appear to have taken place where equity awarded damages […].Damages are a monetary payment awarded for the invasion of a right at common law. Equity aimed at restoring a person to whom a duty was owed to the position in which he or she would have been had the duty not been breached. This it did through a variety of remedies, including compensation.The Court of Chancery never entertained a suit for damages occasioned by fraudulent conduct or for breach of trust.  The suit was always for an equitable debt or liability in the nature of debt.  It was a suit for the restitution of the actual money or thing, or value of the thing, of which the cheated party had been cheated.But while the same approach of restitution or restoration applied in the case of simple compensation not involving the restoration of property, the difference in practical result between compensation and damages is by no means as clear. […] On this matter, I fully agree with Cooke P. in Day v. Mead, supra, at p. 451, that in many cases it is "a difference without a distinction".

This means that equitable compensation is an alternative to other equitable remedies, esp. where the defendant's gain is lower than the harm done to the plaintiff (otherwise, the plaintiff should seek restitution of disgorgement, see pp. 37, 45).

Discussion on Breaches of fiduciary duties Question: can you breach a fiduciary duty you didn't know you were under? Can you

unknowingly abuse your rights50? Put otherwise, can you change the rules of causation and remoteness on the “good faith” of the defendant (perhaps that's what LaF is trying to do, after all equity started off as a court of conscience).

Everybody agrees that fiduciary duties are important, and different. Situations where they arise are hard to discern (Hodgkinson, Wynrib), so they are often penalize more strongly. On an economics view, this would be like having only one police officer in town but chopping arms off robbers (economics doesn't care about fairness, just efficiency – and one officer saves a lot of money). However, the punishment cannot be to drastic as to make overly cautious (fear of mistakes, fear of emergency, fear of breach, even efficient).

Canada is a leader in finding breaches of fiduciary duty: everybody agrees that a breach of trust is one, but Canada always has breach of confidence and many others (Lac Minerals, Cadbury).

The question then is whether we apply different standard of remoteness (see above): there was a different standard per LaF in Hodgkinson, per McL in Canson; there was none in Cadbury.

There's a nice discussion of Lord Cairn's Act because before you had to go through it, but since LAC Mineral, it's not necessary anymore.

2.2. RemotenessThe only question that remains is one of fusion: does equitable compensation have the

same limitations (remoteness, mitigation, etc.) as common law compensation? Categorising a wrong as breach of fiduciary duty effects the available heads of damage

and quantum, as is very clear in Norbert v. Wynrib: LaForest, who has relied on the common law tort of battery was less generous than McLachlin who had found a breach of fiduciary duty.

LaForest thinks equity and common law jurisdictions have fused and that rules should only be different where there is a public policy reason for it (as in Hodgkinson; unlike Canson). 50 In the civil law, L'HD seems to be saying yes. But so does the common law: law of trusts…

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McLachlin thinks the rules of equity are different (Canson) and that should causal be relaxed, but only to the extent it is linked with the wrongdoing (not the engineers in Canson; not the market crash in Hodgkinson).

What is certain is that (1) the rules of remoteness can change and they change all the time (whether in equity or in common law, where the rationale most probably being something about deliberate wrongdoing), that (2) the law is not clear as to when these rules change (lack of previsibility), as a consequence of strong and continuous dissent, and majority judgements with a strong discretionary component51, and that (3) remedies don't replicate the duty breached (at least on the LaForest view, with the public policy concerns).

Discussion on this. SS: in theory, they have the same position in Canson and in Hodgkinson. But in practise,

LaForest ends up offering more compensation than McLachlin in Hodgkinson.o Obbiche: that's not a very fair presentation (not that I particularly want to defend

LaForest…): (1) the big difference is not in the fusion argument, it's in the finding a breach of duty (LaForest didn't find one in Wynrib and he was less generous than McL who did); (2) LaF doesn't depart from his interpretation, he just decided to find a policy reason; (3) Maybe LaF just took the conscience side of equity more seriously; (4) we shouldn't hit on LaForest so hard, because L'HD sided with McL in Canson and with LaF in Hodgkinson…

o SS: McL obiter to the effect that even if she had found a breach of equitable duty, she doesn't think the but-for test would have been satisfied, and there lies the real “problem” of LaF going further than McL

o Re-obbiche: given the trump card of public policy, is it problematic to that extent? SS hates theses cases where McL and LaF make distinctions on unknown policy reasons

(same in PEL cases). Student: perhaps McL trying to distinguish causation and remoteness; remoteness is

different whether you are in equity or not, but causation is the same (so it fails both times on the but-for test)? And LaF just thought causation is different, because of public policy reasons.

Recap – Equitable DamagesTraditionally, equity did not give monetary awards. However, Lord Cairn's Act made it

possible to substitute damages for specific performance where they would be more appropriate (Wroth, Miller, Boomer, Price v. Strange) (and where you can't claim for common law damages because, e.g. no loss has occurred, Redland Bricks).

It is not the same as “equitable compensation” which are damages for an equitable wrong (trust, fiduciary duties, etc.). It is an alternative to other equitable remedies, esp. where the defendant's gain is lower than the harm done to the plaintiff (otherwise, the plaintiff should seek restitution of disgorgement, see pp. 37, 45). With the fusion, a question arose as to the rules of remoteness to be applied: Canson and Hodgkinson the two leading Canadian cases are confusing. While it is certain that the rules do change, the law is not clear on when or why or to what extent they do: one school of thought (LaForest J.'s) thinks the rules of causation and 51 On an Australian view, where equitable wrongs are discretionary, this is the perfect place to be discretionary. However, McL believes in equity, a little less in discretion.

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remoteness should be the same in common and in equity unless there's a public policy reason for changing them; another (McLachlin J.'s) thinks the remoteness rules should be different, not the causation one, but not too different.

III. Non-compensatory DamagesIII. Non-compensatory Damages1. PUNITIVE DAMAGES

The general rule is that criminal law is punishment and civil law is about compensation. However, there are cases where there was egregious behaviour but no corresponding crime: shouldn't the defendant be punished? But at the same time, doesn't that grant the plaintiff an undeserved windfall? But it will heal their stigmas. But what about the lighter burden of proof in civil trials?

SMITH (Stephen), Contract Theory (2004) on ‘Punitive Damages’Even when the breach was deliberate, there usually isn't any sort of punitive damages. Civil law is

about compensation, wrongdoing is more a question of criminal law. This is also explainable on an efficiency approach. «But from the traditional rights-based view of contract law, the refusal to punish deliberate breach is a genuine puzzle.» «In the end, the most plausible explanation of the rule from a rights-based perspective is the traditional one that breach of contract is simply not serious enough to attract punishment.» Wrongdoing must be spectacular to get a punitive sanction. The breach must be very serious to warrant punishment and not just compensation.

From my own LegalMeth paper:Exemplary damages are criticised on the following ground: they contravene to the exclusivity of the compensatory function of tort law, and potential to the intention of the legislator (by imposing a standard of fault). The defendant is also at a disadvantage since he or she does not benefit from the safeguards of a criminal trial and that the plaintiff has a lighter burden of proof to meet. Though the idea that the double compensatory damages has been expressly set aside (Cush-Crawford v. Adchem Corp 271 F. 3d 352 (2e Cir. 2001) stated they could be awarded in the absence of fault), some authors find that they provide an undeserved windfall to the plaintiff (note however that in some American States, the punitive awards are not given to the plaintiff but rather donated to related funds.) Finally, their unpredictable value makes the law uncertain, and economists argue that in the end, it is the consumer who absorbs them. [All these arguments are developed in Gary S. Becker, “How to Put the Right Cap on Punitive Damages”, Business Week, no. 3849 (15 September 2003), 28, at p. 28]. Those in favour of punitive damages believe it is a way to touch one individual particularly without straying away from the rule that like cases should be treated alike or to punish a behaviour that is most shocking without being criminal. As an instrument of deterrence, they complement the retributivism of compensatory damages, thus protecting more thoroughly certain rights [Karen L. Sauvageot, “Dommages-intérêts punitifs and fédéralisme”, (2004) 4:1 Global Jurist Advances (Berkeley Electronic Press), article 1, at p. 1].

The answer to these concerns varies from country to country, but usually, we accept a mild form of punishment (note that punitive damages are unavailable where there has been a criminal sentence):

Punitive damages are wild in the United States, but that might be because there are no costs.

In Englando In “public” law, there are punitive damages against civil servants who act wrongfully,

e.g. abuse of government power (Rookes v. Barnard, Cassel v. Broome).

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o In “private” law, mostly in where the defendant has done something wrong (defamation, breach of copyright, sell Pinto cars where the gas tank was placed in a dangerous place) to gain profit (e.g. sell more newspapers, save money by making a smaller car) [breach-for-profit]. In any case, it is always only for torts law, never for contract.

Canada has accepted punitive damages in contract cases, esp. insurance contracts, as was the case in Whiten. o In Vorvis, McIntyre had said something about punitive damages being granted in

contract cases where there is an “actionable wrong”, and there had been a bit of debate as to the meaning of this expression: if it meant “tort”, Canada would align itself with the English position.

o But in Whiten Binnie makes clear that “actionable wrong” is some sort of independent duty, that it can apply to torts, breaches of contracts and breach of the duty of “good faith” (as was the case in Whiten).

o SS thinks we should have the same standard of maliciousness for contract than we have for tort (there is usually a criminal law equivalent to torts, but rarely for contract); punishment is about what is morally wrong, and efficient breach is about utility.

o SS: By permitting punitive damages in contract actions, there might have been a sort of confusion between compensatory damages and punitive damages. This confusion–which was foreseeable because most of the Anglo-Canadian cases do not distinguish between these awards– comes from the fact that contract are entered into to altering the legal status quo (so the breachee wants compensation for what didn't happen) while wrongs committed in tort situations alter the status quo (and parties want to be put in the situation they were in prior to the breach).

2. NOMINAL DAMAGES. Not all wrongs involve a loss (e.g. trespass, certain breaches of contract), and the rules of

compensation are quite clear: no loss, no compensation. Nominal damages are awarded where courts want to show the defendant was a fault, where no compensation can be awarded because no injury occurred52 (C & P Haulage v. Middleton).

This symbolic recognition that a wrong was committed but that no harm was done. It is a clear example of the creation of a right by courts (ubi jus, ibi remedium53).

Courts preferred nominal damages to declaration, which they felt were useless. Also, at common law, to find out one's rights, one has to look at past judgements, where only the order is always clear.

Recap – Non-Compensatory DamagesExemplary damages are not traditionally welcomed in the private law because they are

about punishment, which rests with criminal law. While England only accepted them in abuse-of-government-power and breach-for-profit cases, Canadian courts have been much more liberal, awarding them even in contractual settings (Whiten v. Pilot Insurance).

52 Or put otherwise, that he's a lucky bastard. 53 Or the opposite.

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You also have nominal damages, which are the recognition that the defendant was at fault even if no injury occurred (so no compensation can be granted) (C & P Haulage v. Middleton). It's almost like a declaration of rights.

E. RE. RESTITUTIONARYESTITUTIONARY R RELIEFELIEF0. Introduction.0. Introduction.

0. INTRODUCTION. Restitution is about someone give something back to someone else (the former owes a duty

of restitution to the latter). Restitution is unchartered territory: we are leaving the relatively well-known areas of causes of action such as contracts and torts and moving into trusts and unjust enrichment, securities and secured transactions or proprietary claims. Restitutionary relief can arise in three mutually exclusive situations: traditional unjust enrichment; unjust enrichment for services and enrichment through wrongdoing.

1. TRADITIONAL UNJUST ENRICHMENTThese are cases of mistake in payment, duress. To have unjust enrichment, you need (1)

enrichment of one party; (2) corresponding deprivation to the other; and (3) no juristic reason for it (Peter v. Beblow).

It is sometimes also called “UE by subtraction” because the assets are subtracted from the holdings of the transferor and added to the holdings of the transferee (who receives the assets without justification), thus creating for the transferee a duty to return the assets. Thus restitution in its first sense: giving back.

It is a specific relief since you are ordered to do exactly what you were supposed to do in the first place. This would mean that the courts are merely confirming the order (when granted a constructive trust, it's only a declaration of rights); however some cases have (involuntarily) raised doubts about this (Peter v. Beblow), thus the second category. See p. 39.

2. ENRICHMENT FROM SERVICESWhere one party has been enriched by another without a juristic reason for it, you either have

to give back the value of the enrichment or transform that into some sort of proprietary remedy. The second option is very controversial: in the absence of correlation between the remedy and the right, is this really UE? Some say the principle of reliance rather than restitution should apply, which would mean the value would be the cost to the performer. Anyhow, it arose in Peter v. Beblow and has been since followed.

3. ENRICHMENT THROUGH WRONGDOING (SEE P. 41).Where one party makes a profit by wrongly using another party’s assets (e.g. a trustee makes

a profit in breach of the instruction of the trust), the wrongdoer must disgorge the profits (give them back to the beneficiary). Again, since the profits made do not necessarily correspond to a loss, many don't consider this to be UE. Also, many think it's not even restitution: you are not “giving back”, you are “giving up”.

I. Restitution as a response to Unjust I. Restitution as a response to Unjust EnrichmentEnrichment

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1. PERSONAL REMEDIESThere is very little to be said on the topic: usually, UE is treated like an action in debt. Most

personal-obligations unjust enrichment cases are about mistaken payment, and the law is quite clear: if the mistake is honest and that the payer genuinely though he owed the money legally, the receiver cannot keep it (RBC).

Other examples include the performance of what the performing party thought was a contract (e.g. a contract that is invalid because it should have been done in writing.

Historically, until the 19th century what is now known as UE was brought up under quasi contracts (with implied promise).

2. PROPRIETARY REMEDIES2.1. Types of proprietary remedies

Proprietary remedies however, are much more interesting54, they include: Delivery up, see p. 17: typically this mandatory injunction to deliver a thing is used in the

case of mistaken transfer of unique goods (rare; courts could use it for insolvency, but they never do). It's about making sure the actual property goes back to the plaintiff.

Equitable lien: the plaintiff is getting a proprietary right in a piece of property to a certain amount of money owed; o E.g. mechanic's lien or where you simply want to make sure the plaintiff gets paid but

you're not giving the plaintiff an actual piece of property (e.g. A pays B 5$ by mistake; B buys a 10$ car; you can't get a CT for 50% of the car; also, the courts want you to get the 5$ back, not to have a share in a property that can fluctuate).

o Since the plaintiff doesn't have right to the property but rather rights secured by the property, he can't get the actual property, if there's a balance, he must give it back.

o But the point is still one of priority over creditors (as a matter of fact, US don't use CT at all, only equitable lien).

Vesting order – all the common law provinces have legislation that allow judges to say “this property is now owned by this person” – but judges never do it55.

Constructive trust is about creating a “trust” through a legal fiction, used in the context of UE 56 . o See SS, Primer on Trusts.o One of the benefits of trust is the fact that you can trace the property right57 (see

p. Error: Reference source not found). o The right to account is the right to see the books and strip the trustee of his gains

(right to the trust property and/or profits derived from it). o The duties of the trustee are to follow instructions and not derivate profits from office

and act in the best interest of the beneficiary (i.e. he owes him a fiduciary duty). These duties are absolute and gain-based , i.e. a trustee who makes a great profit for

54 And by interesting, I suppose we mean complicated. 55 LiS thinks it's because they just don't know about it. Common law courts historically didn't have this power, so there is no jurisprudence on the subject. LiS thinks it's would be simpler than the CT. 56 It looks like the cause of action is unjust enrichment but instead of ordering the “repayment of the debt”, courts say that the plaintiff has a proprietary right to the money.57 Playboy club case where a lawyer went bankrupt after gambling the trust money at the Playboy club. The beneficiaries sues the Playboy club for having been UEed with the chips. And they won. But SS finds it surprising.

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the beneficiary in breach of the instructions or who makes a profit for himself without harming the beneficiary is liable (Phipps v. Boardman).

o The legislation has created a lot of CT (employee withholding of vacation deduction, health plan, taxes, etc.; government priority through CT in insolvency58)

2.2. Reasons for proprietary remediesSuch remedies, which are the exception, can be ordered for three reasons: title has passed:

o CT, for example, can only arise where title has passed59, o Otherwise , use detinue, conversion or any other proprietary remedy because it's

yours60, the property is unique (Cohen v. Roche) the defendant is insolvent and the court feels the plaintiff should have a better right than

the creditors (Chase Manhattan Bank). o This is the subject of much debate: by characterising the plaintiff as an owner, it

grants him a better right that the creditor's right, but is this fair?o When you pay by mistake, you expect your money back; when you loan money, there

is an implied risk. SS thinks it's the difference between impaired consent (mistake) and a failed condition (non-performance)61.

o Birk adds that it is no really unfair to the creditor in the sense that they cannot say that they had expected a mistaken payment to be part of the insolvent person's assets (but if they did, no CT will be imposed: Ellingsen).

o Plus it would bring UE in insolvency/secured transactions rules and hard-ass commercial lawyers dislike that.

o This being said, is no clear that Chase Manhattan is still good law in England where many recent cases have, without formally overruling it, stated that a proprietary UE remedy will rarely be granted for mistaken payment. And there are too little cases in Canada to form an enlightened opinion.

o Proprietary rights in CT are the parallel for insolvency, the proprietary rights in the rights for gain-based remedies (see p. 45, Reid).

Starts on a discussion on how you can explain UE away: carelessness is encouraged; it's just property law and the title never passes (no matter what the law says).

2.2. Do CT orders replicate a right or are courts creating a new right?Arguments for the confirmation of a right: if you see CTs as real trust, then the rights

arise at the second the mistaken payment is made because a trustee can never profit from the trust. In the employee withholding cases, the CT arises at the second the money is withheld, and that's crucial because it gives the employee a right to a court-order even if the company goes bankrupt. If it's true that the CT arises on the facts (like in Chase), what the court is doing is just a declaration of the rights. There's no imposition of trust, they are just recognising it – the order

58 Couldn't they just grant themselves a priority?59 Certain kinds of mistakes don't make the title pass (void and voidable, pretty much), e.g. mistake about identity (who you are = doesn't pass), but not attributes (I thought you were trustworthy = does pass)60 There can be no unjust enrichment because the defendant never had the benefit of the ownership of the thing.61 You clearly will never get CT for a failed contract.

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that the trustee give the property to the beneficiary is an event separate from the declaration. Student: But if you didn't know there was a trust and you breached it, you could be sued for damages? SS: Good point, but I guess you could then sue that for unjust enrichment. This view entails less discretion.

Arguments for the creation of a right: however, if you see CT as a pure remedy where other creditors are lurking, it's a personal remedy with a priority, so it's retroactive and CT is a misnomer. Though many commentators think it is a really bad case62, Peter v. Beblow seems to suggest that CT create new rights because her cause of right was housework and the object of the trust is the house. This view entails more discretion.

3. TRACINGWhere the defendant is in possession of the property the plaintiff owns, he can ask for it:

this is delivery up. But when the defendant sold or gave the property to third parties, the plaintiff has three choices:

He can make a personal claim in conversion: you took my property and converted it to your used, but that only gives you monetary damages.

He can follow the specific asset, and ask it back from the person in whose hands it now rests unless that person is a good-faith purchaser for value.

He can trace it, i.e. “follow” the assets it has been converted into (happens a lot in banking and bankruptcy cases)63 (Foskett). This choice the plaintiff has as to the remedy makes it hard to figure out when the duty

arises.

Recap – Restitution: from traditional UE and mistaken payment to insolvency and tracing

In the strictest sense, restitution is about someone give something back to someone else: it is a specific relief. On this construction, the following are restitutionary awards: order to repay a mistaken payment (RBC), equitable lien, delivery up order, constructive trust (Chase Manhattan, Ellingsen). There is usually a notion of unjust enrichment, i.e. an enrichment of the defendant, a corresponding impoverishment of the plaintiff and no link between the two.

Cases of constructive trusts are the most controversial: as a proprietary remedy, one would suppose they arise at the moment of the breach of the obligation. This entails a direct link between the enrichment and the property and less discretion.

However, some unjust enrichment cases have granted a proprietary interest where the enrichment was personal (services rendered): Peter v. Beblow. This was the beginning of more discretionary awards with regard to unjust enrichment claims.

When the defendant is not in possession of the property of the plaintiff, the plaintiff has three choices: he can make a personal claim in conversion; he can follow the property or trace it

62 “This is wrong because the plaintiff is trying go around the legislation which protects only married interest. Active judiciary to get morally attractive results that just mess the whole case law (being UEed about services or giving on condition that he would not leave).” SS finds it funny that Daglemen in UK, Pettkus v. Becker and Peter v. Beblow, are all the most famous UE cases and the most learned scholars don't think they are real UE cases.63 In these two proprietary claims, property itself as a chose in action…

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(Foskett). This choice the plaintiff has as to the remedy makes it hard to figure out when the duty arises.

II. Gain-Based AwardsII. Gain-Based Awards6464

1. INTRODUCTION1.1. Are they fair?

When the courts order a wrongdoer to disgorge the profits his wrongdoing made him gain, it is making a gain-based award. You will never get it for personal property. There is a reluctance to make these fit under restitutionary awards because, while it is true that the plaintiff against whom some wrong was done is getting money back, this money doesn't correspond to his loss, it's rather the amount that the Law wants out of the hands of a wrongdoer. In the absence of correlation, it cannot be said to be UE stricto sensu, and cannot either be said to be compensation. It also creates a problem similar to the one raised by punitive damages about the possible windfall of the plaintiff (see p. 35) –actually, the problem is stronger because an honest defendant could be asked to disgorge his profits (Phipps). But you don't need a wrong in UE, a juridically unexplainable but link loss and gain suffices.

The most common view is that this is an area of law being made (thus its being unclear), that it is about wrondoing and not just loss , and that it's about judges finding moralistic reasons to strip people of profit wrongfully acquired. Also not that all these cases have something to do with property (intellectual property, goods, trespass, trust res; they are never cases of battery, assault or negligence) and see Weinrib about it (property is an exclusive right to a thing and its fruits, and profits are fruits, so profits derived from misappropriated property should be given back to the plaintiff). You may also want to see Stevens though he offers a fully different explanation (courts are concerned with the value of the right infringed).

WEINRIB (Ernest J.), “Restitutionary Damages as Corrective Justice”[This is a groundbreaker theory in the sense that Weinrib links a bunch of cases nobody had made

sense of]. Since property gives proprietor an exclusive right to the thing (and correlative duty on others to respect that right), misappropriation of that thing (or of its natural accessories, say) by another will most often give rise to restitutionary damages (and as such, they are an entitlement). “Restitutionary damages reverse the wrong by showing, through the return of the benefits, that the law considers the defendant's implicit assertion of ownership to be a nullity whose consequences are to be undone […] Thus, restitutionary damages are available for intentional torts against property and not for harm to property that results from negligence”. Property leads to a more satisfying answer than corrective justice because it explains the plaintiff's “windfall”.

This means Ashman is correct and Inverugie is wrong. Near the end, Weinrib take the example of a thug gets paid to beat you up [Blakes is a case like that

in the sense that you are paid to do something you know is wrong]. Weinrib says that your bodily integrity usually isn't considered a property right: if you get money running me over during a drive race, you can't get money I won; but if I injure you intentionally to get a sum of money, I am treating your body like a piece of property (I am “commodifying it”. So we take the money like we would if he had beaten my horse.

EW's only problem is with good-faith purchasers.

STEVENS (Robert), “Rights and Torts” [not in casebook]Contrary to what is often believed, the courts are not primarily or exclusively interested in

compensating for loss, but there are rather concerned with is valuing a right that has been infringed65: the

64 GBA and CT are the most uncertain areas of the law–just wait till we get to CT for GBA.

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proof of this is that [despite what is said of nominal damages?], there are many cases about people who have been compensated even if they couldn't show a loss.

After an exhaustive review of case law, Stevens draws a distinction between damages awards set at (1) the value of the right itself, i.e. the plaintiff will get a sum of money that represents the value of the right infringed, this could be the cost of purchasing an alternative (substitute SP)66; or (2) value dealing with consequential loss.

Now, onto gain-based awards, RS's argument goes like this: if you infringe my right (copyright, trespass), we have to value my loss, which will be done at market-value, “objectively” 67 . RS accepts that where there is no loss, you can concentrate on stripping the wrongdoer of his profits at market-value68. RS thinks Inverugie is right and Ashman is wrong.

1.2. Cases in which gain-based awards arise A breach of equitable duty (usually a fiduciary duty, usually trust) gets the plaintiff

account of profits69: profits made a given back (Phipps); the law is clear on the situations that give rise to an account of profit, and it's value –except in cases of proprietary awards (see p. 45; Reid70).

The answer to the breach of contract is meant to be compensatory and is called damages (though sometimes called restitutionary damages). Traditionally, like punitive damages (see p. 35), you don't get them.

Tort:o breach of copyright (weirdly called account of profits because originally, it was a

breach of equitable duty); o trespass (often called way leave cases because it's the sum of money the owner could

have charged the trespassor to license him to pass); o interference with goods (same, here the “way leave” is rather a rental charge).

2. TORT2.1. The problem of mesne profits.

Mesne profits are sums of money paid for the occupation of land to a person with right of immediate occupation, where no permission has been given for that occupation. In your typical case, the plaintiff will get market value, which is also what the defendant saved and what the plaintiff lost (rental rate is a proxy for value). However, it is not clear which approach should be taken when it makes a different: disgorgement of defendant's profit (Ashman) or compensation defendant's loss (Inverugie).

In Ashman, the defendant was a trespasser (clear wrongdoing), but the RAF didn't suffer a loss because they wouldn't have been able to rent the house. The RAF suggested that her trespass gain was what she would have paid to get a license to stay. But the reality is that if Ashman had had to pay for her housing, she wouldn't have chosen a house that had the value of

65 SS: really the opposite of civil law. But RS is a pure common-law dude. I mean, he doesn't like Donoghue c. Stenvenson because he feels the common law was trying to be like the civil law and that all of the 20 th century tort law has gone downhill from there. 66 Stevens calls it substitute remedy in a more metaphysical way. SS thinks you should actually go buy; Stevens thinks you value the right (at market value though not explains).67 This wouldn't take into acount the subjective value of a piece of property to the plaintiff. 68 But what if he lost money?69 Do not call them damages, they are not about compensation!70 Careful about the confusing Blake: breach of fiduciary duty is argued but it's on the breach of contract that the claim succeeds.

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the RAF's, she would have gone to some city-subsidised dwelling. It is that rent that she saved, that is her profit, and that is what she is asked to disgorge (“subjective devaluation” where the amount due in restitution is reduced by the particular circumstances of the defendant).

That would better correspond with the idea of gain-based award: it's hardly compensation for RAF's loss. But if we're going after her profits, it's almost like an account of profit (akin to equitable duties). Lord Hoffman seems to be using the language of restitutionary damages, suggesting this is unjust enrichment, but it can't be the case since the loss and profit don't correspond.

Question: if there are no losses, why don't you stick to nominal damages?

In Inverugie Investments Ltd v Hackett, the Privy Council rejected a purely restitutionary approach to the assessment of damages for trespass and held that the defendant was liable for rental on a daily basis, despite the fact that it had not made any profits from its occupation of the apartments. Objective assessment of the mesne profits, without regard to the actual profit made, or to subjective devaluation. Lloyd LJ. saw mesne profits as neither wholly compensatory nor wholly restitutionary, but rather as combining elements of both. Pleading Ashman wouldn't have helped Inverugie because Hackett made no profit.

What explains the difference? Which is right? Couldn't all this be explained by conscience and context? Ashman was a poor widow.

Hackett was a commercial spoliator. Stevens thinks Inverugie is right: objectively, the value of the right is the market-rental

right. Weinrib thinks Inverugie is wrong: since the property derived no fruits, nothing can be

claimed of the defendant.

2.2. The problem of history (see also Curwen)2.2.1. History: strict categories.

Historically, what we are looking at would have fallen in three writs: Debt, derived from property law71, which was proprietary (so no wrong): it's mine, give it

back Trespass: roughly today's tort law; various kinds of wrongdoing. Covenant: more or less today's contracts with a strong form requirement (deed or seal),

again, proof of wrongdoing not necessary.

The problem with covenant is that to get a deed, you need to know how to write. So people tried to use debt72 instead (in which wrongdoing was also not necessary), for both money and things. Sometimes, the agreement could have looked like a contract of sale (contract yes, but about property). Sometimes, it just could, so people created penal clauses, which are debt-like clauses: paint my house or pay me 10 000$ (debt for non performance). Courts liked it at first and then not (hence modern reluctance). All the same, UE was explained as a quasi-contract, which made it an action in debt.

But this clever scheme had one shortcoming, the wager of law: to free himself from a debt, a debtor could bring twelve friends and have them swear under oath that he had no debt. At

71 Debt was proprietary because most of the payments were made in nature. I think I've already written this down, in the vindicatio/SP area. 72 Thus detinue coming from debt.

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first, the oath was taken seriously but it eventually became a license to perjury and the risk made the action in debt less interesting.

At the same time, all the misperformances that that couldn't fit under debt (which only included non performance) were being tried under a subcategory of trespass, the assumpsit (from the Latin “he has undertaken”), which would later come contract law. Because of the risks of the wager of law, people tried to bring most debt actions (non performance, unjust enrichment → conversion) under the heading of assumpsit.

This was first accepted through fiction: when claiming in debitatis assumpsit you were not claiming in debt, you were claiming for the promise what would follow the debt. Theoretically, the causes of actions were two wrongs: the action in debt gave you a promise as a remedy, and the breach of this promise was the cause of action for the assumpsit claim. You had to choose, “waive the tort” to get the conversion. Letting go of the tort was almost like saying there was no tort, i.e. no wrong.

But, in United Australia , the courts said that this was a fiction and that you can have two remedies arise of the same wrong, but that, out of fairness and as to avoid double “compensation”, you have to choose 73 .

2.2.2. Today: one wrong, two remedies. In United Australia, you had a (relatively common) situations where there are two

remedies for only one tort: a “normal” tort remedy (conversation, damage) or a gain-based remedy. Another example could be my paying you to deliver goods you fail to deliver: I can either ask for delivery up or for my money back: one wrong, the breach of contract, could give rise to a damage claim for breach or a claim for unjust enrichment (where it doesn't matter that we have a contract and that you broke it, all that matter is that you got money that I lost for no reason).

But United Australia made it clear that despite the language, it's not the erasing of one of the two remedies, it's an election. And the cause of action is the tort. So Birks et al take this to mean that one wrong can give rise to many remedies.

However, Birks et al also think that the rights arise at the time of the breach. But since only one is due, how could a zealous defendant free himself from his obligation if he doesn't know which remedy the plaintiff will elect? SS thinks choice and immediacy are not compatible.

3. BREACH OF FIDUCIARY DUTYFiduciary duties are very strict: Phipps was liable: he had breach a legal duty but was in

no way morally culpable74. SS says that the problem in cases of breach of fiduciary duty is relatively the same than in

United Australia: as beneficiary, Boardman could either go after the profits or follow through with fiduciary duty. In this case, profits were chosen, but if there had been a loss, Phipps would certainly have been sued in breach of his fiduciary duties. Obbiche: but can't we see the profits as the material embodiment of the breach (so it would only be one thing)? Think Weinrib.

For SS, multiply remedies are not coherent with the idea that remedies arise as soon as the wrong is committed (Birks), because a wrong means a duty, and the defendant wouldn't know which duty to fill (“What are they supposed to do? Call the plaintiff up and ask them what

73 It is still problematic in civil law. 74 This discrepancy between legality and morality annoys SS.

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they prefer?”). However, if you think these remedies are created by the court, it makes more sense (give the gains as deterrence chosen by courts).

4. BREACH OF CONTRACTThe traditional rule is that you don't get gain-based award from contracts breachor

(economic theory of efficient breach, pretty much): you can only get something if you lost something (e.g. New Orleans firefighter case, Renault Dealearship Case). Recently, there have been a few exceptions in cases some don't agree are contract cases, so it's not clear whether we are moving away from the traditional rule or not.

Wrotham would be one of these contract-cases departing from the usual theory, and decides that when the breach of a “duty” gives the breachor an advantage and doesn't disadvantage the breachee (so no loss), the compensation will be that of the reasonable price of having been in a situation where no breach could have occurred. “Reasonable compensation” still left him with 90% of his profit. This is like a way-leave. Or Inverugie?.

However, the problem with Wrotham is that some construe is as UE: the covenant lowered the value of the houses; as a seller, I made you save money on the purchase price, on condition that you'd respect the covenant; you broke your promise, I can know sue you for loss of this negative benefit.

Put otherwise, the damages were qualified as damages for the loss of an opportunity to bargain, as being way-leave (i.e. a reasonable price which the plaintiff could have obtained for releasing the defendant from the covenant); but it was accepted by the Court that on the facts the plaintiff would not have granted any such release. The appropriate award of damages would be “such a sum of money as might reasonably have been demanded by the plaintiffs from Parkside as a quid pro quo for relaxing the covenant.” This is clearly open to a restitutionary interpretation, although the court is not clear on whether its it restitutionary or rather compensatory.

AG v. Blake is another problematic case. The House of Lords allowed the appeal and ordered Blake to be stripped of his gains, in an account-of-profit sort of way, after a contractual breach. While they clearly stated this was an exception, they never explained why they had departed from the traditional loss-based compensation rule, or which cases would from then on follow the gain-based approach an not the loss-profit one.

The Court of Appeal–though it was overturned for setting too strict a test–at least had the merit of suggesting one: cases of “skimped” performances (e.g. New Orleans Firefighters or Tito v. Waddell (No. 2)75) and cases where the “defendant does the very thing he was not supposed to do under the contract” [e.g. Wrotham76 or Blake]. Only in the latter case should the defendant be stripped of all profits.

5. GAIN-BASED PROPRIETARY AWARDS5.1. The issues.

75 Where, Viscount Megarry preferred the compensatory approach to the restitutionary one, “it is fundamental to all questions of damages that they are to compensate the plaintiff for his loss or injury by putting him as nearly as possible in the same position as he would have been in had he not suffered the wrong. The question is not one of making the defendant disgorge what he has saved by committing the wrong, but one of compensating the plaintiff.”76 But the HoL thought is was too rough for restrictive covenants (like non-competition covenants). Even in the civil law, which is not very strong on efficient breach, nobody has ever suggested this. SS thinks it goes along with the fact that we don't have punitive damages with breach of contract.

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So far, we were concerned with gain-based monetary (personal) awards (see p. 41). We will know move to the doubly controversial area of gain-based proprietary awards, which are usually through the no less controversial constructive trusts (see p. 38). You should make a claim for a gain-based proprietary award if you want the defendant's property (either because it's specific ( Soulos ) or because a proprietary claims gives you a better claim than creditors ( Reid )) and that you suffered no loss (in the absence of loss, it cannot be considered UE in the Peter v. Beblow sense → not “restitution” stricto sensu, not about giving back, about giving up).

Many people think the cases we are about to study are plainly wrong: you can't ask for gain-based propriety award, you never owned the property you are claiming (unlike Chase Manatthan or Boardman)!

5.2. The rulesSoulos said that, where a fiduciary duty has been breached, the plaintiff can get a CT

where there is neither UE (as in Peter v. Beblow) neither a tracing situation (Foskett), as long as the following rules are. Soulos seems to be giving a test for situations where proprietary gain-based awards will arise. You need

(1) an equitable obligation (e.g., a fiduciary duty); (2) assets in connexion with the duty; (3) a legitimate reason for the remedy (either personal (Soulos, Peter v. Beblow) or

deterrence-based (Hodgkinson or punitive damages-like); and (4) nothing that would make the CT unjust

That last step is wiggle room; but some argue it's not a step that bars the creation of a CT, just its enforcement by the courts. In Reid, the CT clearly arose at the moment of the breach: pre-existing duty. In Soulos, the court looked at all factors including those that arose after the breach: that goes more in the direction of a new duty.

Recap – Gain-Based Awards: Personal and Proprietary Claims

Three approaches: it's all UE; it's all compensation; it's something else (Weinrib, Stevens, SS).

Traditionally, private law is about compensation of the loss. If there has been no loss, there could be no order (Sopinka's view in Soulos; Megarry in Tito v. Waddell; reason for nominal damages). However, if the law is about wrongdoing (esp. since we're in the realm of Equity here), the rules could be different. Weinrib notes that gain-based awards are only ever attributed in relation to property, which is very strong in the common law –you get the defendant's profits because he used your property and as an owner you have a right to the fruits of your property.

Gain-based awards arise in three cases: (1) breach of equitable duty (Phipps, Reid); (2) breach of contract (traditionally impossible; Wrotham; Blake); (3) tort, either through a “way-leave” assessment or with mesne profits (but should they be calculated on a profit basis, as in Ashman; or on the compensation principle as in Inverugie?).

Also, it clear today that one wrong can give rise to two remedies (United Australia).

So we have problems with constructive trust arising out of weird unjust enrichment and with gain-based awards because they depart from the traditional rule of compensation of losses. Let's just mix the two together. You should make a claim for a gain-based proprietary award if you

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want the defendant's property (either because it's specific (Soulos) or because a proprietary claims gives you a better claim than creditors (Reid)), that you suffered no loss and that the defendant still has the property (it's not on at the stage of tracing or following). From Soulos, a gain-based proprietary award will be granted when: (1) an equitable obligation has been breached; (2) the assets are in connexion with the duty; (3) there is a legitimate reason for the remedy; (4) nothing makes a CT order unjust.

OVERALL SUMMARY (SS)

Remedies are court orders. Various types of remedies exists: Specific reliefs are a product of equity and they are less frequent because of the

institutional reluctance to tamper with people's liberty. E.g. injunction, delivery up. Monetary reliefs (damages):odamages for breach of fiduciary duty (Reid);oLord Cairn's Act: damages in lieu of injunction, ogain-based damageso compensatory damages (compensation for loss)o cost of cure (cost of replacement)o consequential loss

Proprietary orders (also equitable, also more complex because they affect third parties), e.g. lien, ejectment, delivery up, CT.

Existence and Content: from when are these remedies available and what is their content? (1) If the court orders replicate/confirm pre-existing rights, the duty arises from the moment the breach is done and remedies law doesn't really exist (it's substantive law). However, it explains why certain orders are retroactive (e.g. traditional CT). (2) If the courts are creating new rights, why shouldn't they only grant damages?

Discretion: do and should courts have discretion when they are making court-orders? Given that they don't have discretion as to substantive rights? Link with (2): if courts have discretion, they re sometimes creating rights: they can refuse to enforce existing rights (e.g. SP – but then no choice but to give damages).

Function and purposes of court orders: What is the function of remedy law: is it to compensate you for your loss (compensation; consequential loss; way-leave), to replace what you have lost (cost of cure; substitute performance), to deter wrongdoers (punitive damages; gain-based awards; contra economic approach); save yourself from insolvent wrongdoers (proprietary awards)

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1

RREADINGEADING N NOTESOTES

Table of Contents.Table of Contents.A. DEFINITION AND ORGANIZATION.......................................................................................................................3

BIRKS (Peter), “Introduction” from English Private Law (2000) [PDF]........................................................3Birks (Peter), “Rights, Wrongs and Remedies”, (March 2000) Oxford J. of Leg. St......................................3SMITH (Stephen), "Rights, Wrongs, and Causes of Action" (2006)..................................................................4SMITH (Stephen), Review of Remedies Reclassified (2006) 112 Law Quart. Rev. 163.....................................4ZAKRZWESKI (Raoul), Remedies Reclassified (2000) [see PDF]......................................................................5SMITH (Stephen), "The Law of Damages: Rules for Courts or Rules for Citizens" (2007)..............................5

B. INJUNCTIONS...............................................................................................................................................................61. QUIA TIMET INJUNCTIONS.............................................................................................................................................6

Fletcher v. Bealey, (1885), 28 Ch. D 688....................................................................................................6Hooper v. Rogers, [1975] Ch. 43 (CA).......................................................................................................6

2. MANDATORY INJUNCTIONS..........................................................................................................................................6Redland Bricks v. Morris [1970] A.C. 652 (HL (Eng.))..............................................................................6

3. ORDINARY INJUNCTIONS TO PROTECT AGAINST TRESPASS TO LAND.........................................................................7Goodson v. Richardson (1874), LR 9 Ch. App. 221....................................................................................7Woolertain and Wilson v. Costain, [1970] 1 W.L.R. 411 (Ch.)...................................................................8Trenberth v. National Westminster Bank (1979), 39 P & CR 104 (Ch.).....................................................8

4. ORDINARY INJUNCTIONS TO PREVENT A NUISANCE....................................................................................................8Miller v. Jackson [1977] 3 All E.R. 338, [1977] QB 966 (CA)...................................................................8Boomer v. Atlantic Cement, (1970) 257 N.E. 2d 870 (NY CA)....................................................................9Spur Industries v. Del E. Webb Development, (1972) 494 P.2d 700 (Ariz. SC).......................................10

C. DELIVERY UP OF GOODS......................................................................................................................................11Cohen v. Roche [1927] 1 K.B. 169............................................................................................................11

Courts of Justice Act, R.S.O. 1990, c. C.43, s. 104(1)...............................................................................................11Rules of Civil Procedure, R.R.O. 1990 reg. 194, s. 44.01(1)....................................................................................11

CURWEN, “Detinue and Conversion” (2007) [see PDF]...............................................................................12D. EJECTMENT (RECOVERY OF LAND)..................................................................................................................12

McPhail v. Persons Unknown [1973] 1 Ch 447 [R.]................................................................................12E.AWARD OF A SUM DUE UNDER A CONTRACT.................................................................................................13

1. DEBT...........................................................................................................................................................................13SMITH (Stephen), excerpt on “Action for an Agreed Sum” ...........................................................................13

White and Carter (Councils) Ltd. v. McGregor, [1962] A.C. 413............................................................132. STIPULATED DAMAGES CLAUSES...............................................................................................................................14

SMITH (Stephen), excerpt on “Agreed Damages Clauses” ]..........................................................................14F. SPECIFIC PERFORMANCE AND INJUNCTIONS...............................................................................................14

1. INTRODUCTION............................................................................................................................................................14SMITH (Stephen), excerpt on “Specific Performance and Injunctions” ........................................................14

Beswick v. Beswick, [1968] AC 58, [1967] 2 All ER 1197, [1967] 3 WLR 932 (HL) [R. X]....................162. SALE OF GOODS..........................................................................................................................................................16

Falcke v. Grey (1859), 4 Drewry 651, 62 E.R. 250 [R.]...........................................................................163. SALE OF LAND............................................................................................................................................................16

Semelhago v. Paramadevan, [1996] 2 S.C.R. 415 [R.].............................................................................164. OTHER NON-PERSONAL OBLIGATIONS ‘TO DO’........................................................................................................17

Tanenbaum v. W.J. Bell Paper Co. Ltd., [1956] O.R. 278[R.].................................................................17Co-Operative Insurance Society Ltd. v. Argyll Stores (Holdings) Ltd., 1998 AC 1 (UK, HL)..................17

5. PERSONAL OBLIGATIONS ‘TO DO’.............................................................................................................................18Lumley v. Wagner (1852), All E.R, 368 [R.].............................................................................................18

6. OBLIGATIONS ‘NOT TO DO’.......................................................................................................................................18Warner Brothers Pictures Incorporated v. Nelson, [1937] 1 K.B. 209 [R.] ............................................18

7. EQUITABLE DEFENSES................................................................................................................................................19Riches v. Burns, [1924] O.J. No. 343 [R.]................................................................................................19Cadbury Schweppes Inc. v. FBI Foods Ltd., [1999] 1 S.C.R. 142 [R.].....................................................19Patel v. Ali, [1984] Ch. 283 [R.]...............................................................................................................19

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Price v. Strange, [1978] Ch. 337 (CA)......................................................................................................20G. DAMAGES...................................................................................................................................................................20

1. COST OF CURE FOR DAMAGE, DESTRUCTION, OR LOSS OF PROPERTY.....................................................................20Liesbosh Dredger v. Edison S.S., [1933] A.C. 449 (HL (Eng.).................................................................20Harbutt’s Plasticine Ltd. v. Wayne Tank and Pump Co. [1970] 1 Q.B. 447 (CA)....................................20Darbishire v. Warran, [1963] 1 W.L.R. 1067 (CA)...................................................................................21General and Finance Facilities Ltd. v. Cooks Cars (Romford) Ltd., [1963] 1 W.L.R. 644 (CA).............21

2. COST OF CURE FOR BREACH OF CONTRACT...............................................................................................................21Ruxley Electronics and Construction Ltd. v. Forsyth, [1995] H.L.J. No. 26............................................21

3. COST OF CURE AS SUBSTITUTE PERFORMANCE?........................................................................................................22SMITH (S.), “Substitutionary Damages” from C. RICKETTS (ed.) Justifying Remedies in Private Law.........22

4. COMPENSATION..........................................................................................................................................................24H. Parsons (Livestock) Ltd. v. Uttley Ingham & Co. Ltd, [1978] Q.B. 791..............................................24

5. TIMING ISSUES............................................................................................................................................................24Asamera Oil Corp. Ltd., [1979] 1 SCR 633..............................................................................................24Wroth v. Tyler, [1974] Ch. 30...................................................................................................................24Johnson v. Agnew, [1980] A.C. 367 (HL (Eng.))......................................................................................25

6. EQUITABLE DAMAGES................................................................................................................................................25Lord Cairns’ Act, (1858) 21 & 22 Vict. C. 27...........................................................................................25

7. DAMAGES FOR EQUITABLE WRONGS.........................................................................................................................25Canson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534 ..........................................................25Hodgkinson v. Simms, [1994] 3 S.C.R. 377...............................................................................................26Cadbury Schweppes Inc. v. FBI Foods Ltd., [1999] 1 S.C.R. 142 [R.].....................................................27

8. PUNITIVE DAMAGES...................................................................................................................................................27Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595 (from Ont)...............................................................27

SMITH (Stephen), Contract Theory (2004) on ‘Punitive Damages’................................................................289. NOMINAL DAMAGES...................................................................................................................................................28

C & P Haulage v. Middleton [1983] 1 WLR 1461....................................................................................28H. RESTITUTION (AS A RESPONSE TO AN UNJUST ENRICHMENT)..............................................................28

1. PERSONAL...................................................................................................................................................................29Royal Bank v. The King, [1931] 2 D.L.R. 685...........................................................................................29

2. PROPRIETARY..............................................................................................................................................................29SMITH (Stephen), Primer on Trusts.................................................................................................................29

Chase Manhattan Bank v. Israel-British Bank (London) Ltd....................................................................29Peter v. Beblow, [1993] 1 S.C.R. 980........................................................................................................29Ellingsen (Trustee of) v. Hallmark Ford Sales Ltd. (2000), 190 D.L.R. (4th) 47......................................30

I. GAIN-BASED AWARDS.............................................................................................................................................301. TORT...........................................................................................................................................................................30

Ministry of Defence v. Ashman, 66 P & CR 195, [1993] 2 EGLR 102, [1993] 40 EG 144, 25 HLR 513 30Inverugie Investments Ltd. v. Hackett [1995] 3 All E.R. 841 (PC)...........................................................31United Australia v. Barclays Bank, [1941] A.C. 1 (HL (Eng.))................................................................31

2. BREACH OF FIDUCIARY DUTY....................................................................................................................................32Boardman v. Phipps, [1967] 2 A.C. 46.....................................................................................................32

Stevens (ROBERT), “RIGHTS AND TORTS” [NOT IN CASEBOOK]........................................................................32Weinrib (ERNEST J.), “RESTITUTIONARY DAMAGES AS CORRECTIVE JUSTICE”................................................33

3. BREACH OF CONTRACT...............................................................................................................................................33Wrotham Park Estate v. Parkside Homes [1974] 1 W.L.R. 798 (Ch.)......................................................33City of New Orleans Firefighters [not in CB]...........................................................................................34Renault Dealership [not in CB].................................................................................................................34Attorney General v. Blake, [2001] 1 A.C. 268..........................................................................................34

4. GAIN-BASED PROPRIETARY AWARDS........................................................................................................................35Hong Kong (A.G.) v. Reid, [1994] 1 A.C. 324..........................................................................................35Soulos v. Korkontzilas, [1997] 2 S.C.R. 217.............................................................................................35

J. TRACING......................................................................................................................................................................36Smith (LIONEL), “TRACING INTO THE PAYMENT OF A DEBT” – THE NATURE OF TRACING...............................36

Foskett v. McKeown, [2001] 1 A.C. 102 (HofL).......................................................................................36K. DECLARATIONS.......................................................................................................................................................37

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Courts of Justice Act..................................................................................................................................................37

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Table of cases in Alphetical Order.Table of cases in Alphetical Order.Asamera Oil Corp. Ltd., [1979] 1 SCR 633 ................................................................................................... 23 Attorney General v. Blake, [2001] 1 A.C. 268 ............................................................................................... 32 Beswick v. Beswick, [1968] AC 58, [1967] 2 All ER 1197, [1967] 3 WLR 932 (HL) [R. X] ........................ 16 Boardman v. Phipps, [1967] 2 A.C. 46 .......................................................................................................... 30 Boomer v. Atlantic Cement, (1970) 257 N.E. 2d 870 (NY CA) ...................................................................... 10 C & P Haulage v. Middleton [1983] 1 WLR 1461 ......................................................................................... 27 Cadbury Schweppes Inc. v. FBI Foods Ltd., [1999] 1 S.C.R. 142 [R.] ......................................................... 18 Cadbury Schweppes Inc. v. FBI Foods Ltd., [1999] 1 S.C.R. 142 [R.] ......................................................... 25 Canson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534 ............................................................... 24 Chase Manhattan Bank v. Israel-British Bank (London) Ltd. ........................................................................ 27 City of New Orleans Firefighters [not in CB] ................................................................................................ 31 Cohen v. Roche [1927] 1 K.B. 169 ................................................................................................................. 11 Co-Operative Insurance Society Ltd. v. Argyll Stores (Holdings) Ltd., 1998 AC 1 (UK, HL) ...................... 17 Darbishire v. Warran, [1963] 1 W.L.R. 1067 (CA) ....................................................................................... 20 Ellingsen (Trustee of) v. Hallmark Ford Sales Ltd. (2000), 190 D.L.R. (4th) 47 .......................................... 28 Falcke v. Grey (1859), 4 Drewry 651, 62 E.R. 250 [R.] ................................................................................ 16 Fletcher v. Bealey, (1885), 28 Ch. D 688 ......................................................................................................... 7 Foskett v. McKeown, [2001] 1 A.C. 102 (HofL) ............................................................................................ 34 General and Finance Facilities Ltd. v. Cooks Cars (Romford) Ltd., [1963] 1 W.L.R. 644 (CA) .................. 20 Goodson v. Richardson (1874), LR 9 Ch. App. 221 ......................................................................................... 8 H. Parsons (Livestock) Ltd. v. Uttley Ingham & Co. Ltd, [1978] Q.B. 791 ................................................... 22 Harbutt’s Plasticine Ltd. v. Wayne Tank and Pump Co. [1970] 1 Q.B. 447 (CA) ........................................ 20 Hodgkinson v. Simms, [1994] 3 S.C.R. 377 ................................................................................................... 24 Hong Kong (A.G.) v. Reid, [1994] 1 A.C. 324 ............................................................................................... 33 Hooper v. Rogers, [1975] Ch. 43 (CA) ............................................................................................................ 7 Inverugie Investments Ltd. v. Hackett [1995] 3 All E.R. 841 (PC) ................................................................ 29 Johnson v. Agnew, [1980] A.C. 367 (HL (Eng.)) ........................................................................................... 23 Liesbosh Dredger v. Edison S.S., [1933] A.C. 449 (HL (Eng.) ...................................................................... 19 Lord Cairns’ Act , (1858) 21 & 22 Vict. C. 27 ................................................................................................ 24 Lumley v. Wagner (1852), All E.R, 368 [R.] .................................................................................................. 18 McPhail v. Persons Unknown [1973] 1 Ch 447 [R.] ..................................................................................... 13 Miller v. Jackson [1977] 3 All E.R. 338, [1977] QB 966 (CA) ........................................................................ 9 Ministry of Defence v. Ashman, 66 P & CR 195, [1993] 2 EGLR 102, [1993] 40 EG 144, 25 HLR 513 ..... 28 Patel v. Ali, [1984] Ch. 283 [R.] .................................................................................................................... 19 Peter v. Beblow, [1993] 1 S.C.R. 980 ............................................................................................................ 28 Price v. Strange, [1978] Ch. 337 (CA) ........................................................................................................... 19 Redland Bricks v. Morris [1970] A.C. 652 (HL (Eng.)) ................................................................................... 8 Renault Dealership [not in CB] ..................................................................................................................... 32 Riches v. Burns, [1924] O.J. No. 343 [R.] ..................................................................................................... 18 Royal Bank v. The King, [1931] 2 D.L.R. 685 ............................................................................................... 27 Ruxley Electronics and Construction Ltd. v. Forsyth, [1995] H.L.J. No. 26 ................................................. 21 Semelhago v. Paramadevan, [1996] 2 S.C.R. 415 [R.] .................................................................................. 16 Soulos v. Korkontzilas, [1997] 2 S.C.R. 217 .................................................................................................. 33 Spur Industries v. Del E. Webb Development, (1972) 494 P.2d 700 (Ariz. SC) ............................................ 11 Tanenbaum v. W.J. Bell Paper Co. Ltd., [1956] O.R. 278[R.] ...................................................................... 17 Trenberth v. National Westminster Bank (1979), 39 P & CR 104 (Ch.) .......................................................... 9 United Australia v. Barclays Bank, [1941] A.C. 1 (HL (Eng.)) ..................................................................... 29 Warner Brothers Pictures Incorporated v. Nelson, [1937] 1 K.B. 209 [R.] ................................................. 18 White and Carter (Councils) Ltd. v. McGregor, [1962] A.C. 413. ................................................................ 13 Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595 (from Ont). ................................................................... 25 Woolertain and Wilson v. Costain, [1970] 1 W.L.R. 411 (Ch.) ....................................................................... 9 Wroth v. Tyler, [1974] Ch. 30 ........................................................................................................................ 23 Wrotham Park Estate v. Parkside Homes [1974] 1 W.L.R. 798 (Ch.) ........................................................... 31

A. DEFINITION AND ORGANIZATION.

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Birks (PETER), “INTRODUCTION” FROM ENGLISH PRIVATE LAW (2000) [PDF]

BIRKS (PETER), “RIGHTS, WRONGS AND REMEDIES”, (MARCH 2000) OXFORD J. OF LEG. ST.Is the word "remedy" useful? Birks things not, that it doubles the word "right". Two parts in the article: (1) courts

are concerned only with wrongs, the responses to which should be called rights and not remedies. (2) the difference between wrongs and non-wrongs cannot be understood properly if we go on talking about remedies.

1. Remedies for wrongs or rights from wrongs? When a wrong is committed, there must be an answer. Usually, compensation. But other possibilities exist: punitive damages, nominal damages, restitutionary damages.

The thing about a given wrong, is that it can lead to more than one "remedy" (Birks would really prefer "right") [image of a jellyfish: one head has many legs], and the plaintiff cannot get both, he (or the judge has to choose)77.

Etymologically speaking, a remedy is something you give to cure or make better. This is how one should construct the word at law, but lawyers have stretched the word to five meanings: (1) cause of action (the law's configuration of the actionability of a claimant's story; it's not a right, it's a hope); (2) right (potion) born of a wrong (bobo); (3) right born of a grievance or injustice; (4) right born of the order or judgment of a court (this is the Blackstone sense); (5) right born of a court order issued on a discretionary basis (most modern meaning).

Right and remedy are not coterminous: there is at least one meaning of remedy that has nothing to do with rights. Birks thinks where right can be used (overlaps), it should be used, and this, for five reasons: (1) no need to duplication of terminology; (2) sometimes, out of one situation, there are multiple causes of action and «the language of remedy cannot clarify this important distinction between multiple causative events hidden within one set of facts and multiple rights born of a single causative event» because for the moment, it can describe both; (3) using rights it destroys the taxonomy of causative even (which is good because the remedy/right arises from the wrong, not from the contract); (4) in the fifth sense (discretionary court orders), the plaintiff has no right to the order, which is a gift from the court –and discretionary remedialism is just wrong78 because litigation would be managed on guesswork, it makes the courts too powerful79; (5) finally, the way remedies is used, one has the impression it only concerns wrongs, which is not the case.

2. Wrongs and not-wrongs. Indeed, the cause of action is not always a wrong, i.e. an infringement of an ordinary right80. Courts are then not asked to remedy a wrong, simply to realise a primary right on a given set of facts.

Smith (STEPHEN), "RIGHTS, WRONGS, AND CAUSES OF ACTION" (2006)Summary of previous Birks article: labeling court orders are ‘remedies’ is misleading because it suggests court

orders deal with something other than rights (responding to infringements of rights, they are necessarily distinct) and that they only "respond" to wrongs (whereas they can indeed "respond" to non-wrongs). […]

About the distinction between wrongs and non-wrongs, SS begs to differ. While it is true that as to the content, court orders often confirm duties arising from non-wrongs, duties that are not remedial. However, remedies are not only about content, they are also about when a court order will be made: and the reason is the failure to perform a pre-existing duty (even if the duty’s content is not remedial).

«Ordinary or ‘substantive’ legal rights are rights that individuals possess by virtue of what they do or what happens to them in their day to day lives, prior to going to a court.» Judgements recognize such rights, they do not create them. One, such rights arise from facts, that can be wrongs or non-wrongs. Two, court orders do not always replicate rights they recognize. It is sometimes hard to tell whether the courts merely mirrored the ordinary right or whether they created a new one (as an equivalent): take unjust enrichment (personal right) may be reversed by the creation of a constructive

77 Example given are of In United Australia Ltd. v. Barclays Bank Ltd (1940) (HL). A cheque made to UA is intercepted by the company secretary who fraudulently endorses it for another company in which he has interest and deposits the endorsed check to the Barclay's for collection. UA sues the third company for restitution of the sum; not for conversion. For Barclay, this amounts to a waiver of the tort, and immunes its. The HofL said that one wasn't to be misled by the words of the forms of actions, that there could be choice, but was to focus on the substance, and that meant that one wrong could lead to two remedies. And that, for Birks should be rights. AND The same in Tang Man Sit v Capacious Investments Ltd (1995, HK, JCPC, about a trustee who, instead of conveying the land to Capacious investment as he was supposed to do, rented it out and received the rent, regardless of the nature of the building which caused greater damage): the language is wrong! Here again, there was a choice: account of profits made in breach or damages for the loss suffered because of the breach. The plaintiff cannot have both, must choose. But this choice can be the judge's. 78 That's a public policy argument for another point rather…79 The power is more active and less passive. 80 Non-wrongs could be unjust enrichment (by mistake). Or order to perform a contract is the natural course of the right, there has been no wrong; LBC: but one could argue if you have it, you must give it back immediatly or that you should have performed.

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trust (real right). Or an injunction against trespass. You have an in rem right to your land, erga omnes. But the injunction against a trespasser is a in personem right. However, one might say that injunctions confirm already-existing duties. But another can say that «the infringement of an in rem right (for example a right to exclusive possession of land), gives rise at that moment and prior to going to court to a different in personam duty (for example a duty owed by the wrongdoer to the landowner to not trespass, etc)»: this is an already-existing, but secondary, in personam duty confirmed by the injunction then confirms. SS thinks this is the Birks approach.

Similar examples are given for orders to pay damages and orders to make restitution. Point is (for SS anyways), that to understand court orders it is necessary to distinguish clearly between their content

and their existence because these two aspects function on different levels. Yes, as to the existence of the remedies, like Birks says: «the events that give rise to the duties that court orders confirm are different from the events that give rise to the order itself, [and] in terms of their content, many court orders merely confirm duties that arise from non-wrongs, such as making a contract or receiving a mistaken payment. The content of such orders is not a response to a wrong, and so in this respect it is correct to say, as Birks does, that such orders are not remedial. But in terms of the reasons for making a court order, an examination of the most important categories of court orders shows that a court order will not be made except on proof of an actual or imminent wrong. In this respect, it is correct to say, with Blackstone, that court orders are remedial, even when the duties they enforce arise from a non-wrong».

Smith (STEPHEN), REVIEW OF REMEDIES RECLASSIFIED (2006) 112 LAW QUART. REV. 163Zakrzeweski's book is organized around threee internal distinctions. (1) Difference between replicative (of the

ordinary right) and transformative (e.g., (payment of damages instead of specific performance) court orders: SS thinks it's brilliant but not easy to apply (no test). (2) Distinction between primary and secondary rights (primary right is the performance of the contract, a secondary right is the right to compensation for injuries suffered as a result of the breach of contract): to SS the problem is that the law is not developed on this taxonomy, even if all of Zekrzewski's system is based on it; (3) origin of remedy.

Not all that emanates from a court is a remedy (there can also be extrajudicial relief or protection orders). However, the following is indeed part of the law of remedies: (1) when the courts will agree to replicate an already existing right (e.g., to order specific performance) and (2) when the courts will agree to create a new right (a lesser concern for Zakrzewski, because law schools shouldn't have classes on "secondary rights").

Zakrzweski (RAOUL), REMEDIES RECLASSIFIED (2000) [SEE PDF]Remedy is used in all sorts of ways. Most commonly, it means judgement or court order. Burrow says it may be

coercitive or not. But even within the realm of court orders, it may mean (1) the event;(2) the command or statement; (3) the order document; (4) the rights generated. Usually the latter, thus a juridical relation.

Terminologic mistakes often made. (1) An action or cause of action should not be called remedy: call it a suit or an action for the process and cause of action when referring to the set of facts that empower the court to grant relief; (2) a secondary right should not be called a remedy because (a) the term remedy is usually attached to concept that have nothing to do with secondary rights; (b) not every infringement of a right creates a secondary right; (c) if the remedies are secondary rights, one cannot talk about discretionary rights; (3) a primary right should not either be called a remedy: Birks argument; (4) Means of enforcement of court orders should not be called remedies: they arise from non-compliance with remedies, i.e. they are a distinct step; (5) final outcome should not be called a remedy because it blurs the line between juridical and non juridical conceptions.

Substantive rights and remedies. Author believes the line between substance and remedy should not be drawn between primary and secondary rights, rather between these rights and court orders [53].

Existence. One may wonder whether substantive rights exists at all: after all, for Holmes "the duty to keep a contract at common law means a prediction that you must pay damages if you do not keep it –and nothing else". Also: which come first, remedies or substantive rights? For the non-common lawyer, it seems that the remedy pre-exists the right (because it may arise on a totally new set of facts), but at the same time, the common law pre-exists (so one cannot ask for a disgorgement because of a mistake in the law81)…

Questions: can remedies exist without rights? Yes if a right is granted for the first time, there is no right yet. And the converse? Yes: one can have a right but cannot see it enforced (prescription, want of form, etc.). So the maxims ubi remedium ibi jus and ubi jus ibi remedium are not fully true.

Smith (STEPHEN), "THE LAW OF DAMAGES: RULES FOR COURTS OR RULES FOR CITIZENS" (2007)

81 See Benson v. Lincold City Council, [1999] 2 AC 349 (HL).

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«In the Western legal tradition, rights are typically categorized on the basis of three questions: (1) against whom may the right be asserted (e.g. a promisor; State or citizen, in the latter can, personal or proprietary); (2) what is the [cause] that gives rise to the right (e.g. a promise); and (3) what is the content of the right (e.g. to the performance of the promise).» SS classifies the rights linked to the law of remedies in three categories.

First, the ordinary rights, i.e rights that citizens hold against other citizens arising from ordinary (not court-ordered) event (e.g. contract, transferring money by mistake): for example, the right to the performance of a contractual obligation and the right to the return of money paid by mistake. «Ordinary rights are the substantive rights that plaintiffs bring with them when they come to court.»

Second, the remedial rights, i.e. rights to court orders, "causes of actions". Like ordinary rights, remedial rights arise from ordinary (or ‘non-judicial’) events, so the content is similar. However, there is a difference as to their exigibility (i.e. against whom the right may be asserted): ordinary rights are asked from other individuals (purely private), remedial rights are asked from a court/organs of the State (so they are public law rights).

Thirdly, court-ordered rights, i.e. rights that courts must take into account when contemplating making an award of damages. They arise out of a juridical (judicial event) act. Their content often replicated that of ordinary rights (as to content and exigibility), but a transformation can occur. They are also private law rights.

There are four kinds of court orders: (1) a mixed private/public law explanation (the court order is a mixed of the ordinary and remedial rights, e.g. order to pay a debt according to certain timely rules, ); (2) a pure private law explanation: the court orders replicate the ordinary right, but the plaintiff has no remedial right (e.g. equitable/discretionary remedies82); (3) a pure public law explanation: the court order only comes from the remedial rights, which means a new "ordinary" right was created (e.g. award of money restitution when UE occurred because of delivery of goods to the wrong person; (4) no legal explanation: existence and content of the order are purely discretionary (e.g., remedial constructive trust, proprietary estoppel).

B. INJUNCTIONS 1. Quia timet injunctions

Fletcher v. Bealey, (1885)83, 28 Ch. D 688Facts. Defendants deposit the slimy "vat waste" produced by their alkali plant on a land they had bought, near river. The plaintiffs are a paper manufacture, using a lot of water. Should the slime get in the river, the paper factory will have to be shut down. Nothing has happened yet. Issue. Can Fletcher get anything to prevent this nuisance84?Holding. In this very case, no.Reasoning. Pearson J. Fletcher was asking for a quia timet injunction, but the requirements are very stringent. There has to be proof of an imminent damage and that it will be substantial and probably irreparable. In this case, the court thought didn't think it'd be met. Yet, if nothing was to be done, there'd be a problem (it's a 10-year lease!). But the court said you can come back later.Ratio. If there is not actual damage, it must be proven that there is an imminent danger for a quia timet injunction to be granted.Comments. The court is concerned with liberty. You don't pre-give court orders, unless there's a damn good reason. The State can't just go imposing fines on people for things they might to –this is a rights-based approach (this goes back to the idea that you need a wrong to get a remedy).

Hooper v. Rogers, [1975] Ch. 43 (CA)Facts. Hooper and Rogers are neighbours of semi-detached houses on top of a hill. Rogers bulldozed a track nearby without warning. Hooper's house started to slide and threatened to collapse. Can Hooper get anything to prevent this nuisance85?Judicial History. Rogers wanted Hooper to restore the angle of the slope. The judge thought there was a real danger, but awarded 750£ pounds instead of an injunction. Rogers appealed, Issue. Did the first instance judge have jurisdiction to make a monetary award?Holding. Yes!

82 SS thinks this is not true. 83 Today there'd probably be some sort of environmental law to deal with this.84 It's not trespass because it's not a direct interference with the plaintiff's property. It's nuisance because one has a reasonable right to quiet enjoyment of a river.85 Again. Strange, says SS.

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Reasoning. Russell LJ. Historically, equity courts mostly gave non monetary orders. Which was sometimes a problem. So Lord Cairn's Act gave the Courts of Equity the jurisdiction to give damages in lieu of an injunction. But soon after, the courts fused, so the act became mostly superfluous. But an incident remains: the Courts can give damages in lieu of a injunction (plus of courses, damages for the loss). But if you've suffered no loss, all you have is the possibility of a quia timet injunction, but this can be transformed in damages. At the discretion of the judge. In this case, the time of the fall of the house can't be ascertain, but it is almost certain that it will collapse at some point, a result. Ratio. Lord Cairn's Act permits to get damages where there is no loss. But you have to show you could have gotten (very likely, not 100% sure) a quia timet injunction. Comments. Here the money was probably given as a means to realise a specific performance, i.e. necessary repairs.

2. Mandatory InjunctionsRedland Bricks v. Morris [1970] A.C. 652 (HL (Eng.))

Facts. As a result of the defendants's digging away the clay of their land, the plaintiff's strawberry farm land is slipping away. The farmers want compensation for what has already happened plus an injunction to make sure nothing else will happen (i.e. restore the land). They want a mandatory quia timet injunction. Note that the defendant did consult an engineer, who told them there was no problem (obviously wrongly). Issue. Can Morris get the quiat timet injunction?Holding. No.Reasoning. Upjohn LJ. (1) A mandatory injunction can only be granted where the plaintiff shows a very strong probability on the facts that grave damages will accrue to him in the future. (2) Damages will not be a sufficient or adequate remedy if such damages does happen (general principle of equity) (3) Unlike the case where a negative injunction is granted to prevent the continuance or recurrence of a wrongful act the question of the cost to the defendant to do works to prevent or lessen the likelihood of a future apprehended wrong must be an element to be taken into account86. (4) 4. If in the exercise of its discretion the court decides that it is a proper case to grant a mandatory injunction, then the court must be careful to see that the defendant knows exactly in fact what he has to do and this means not as a matter of law but as a matter of fact, so that in carrying out an order he can give his contractors the proper instructions. Here: (1) there is slip and the causality has been proven, (2) damages are insufficient for the scale of the future damage is unknown and unascertainable. (3) However, Red Brick did not behave unreasonably even if a wrong was committed and it's too heavy. Ratio. Mandatory injunctions need to be limited to that the defendant not impede too much on the plaintiff's liberty. See criteria in reasoning. Comments. To SS this is, in common sense, perfectly appropriate. He will pay if the harm happens, but no injunction because it's too costly. If you're an equity lawyer, this is fine on conscience (common sense fairness). But in common law, to SS, when we say we are looking at the behaviour (un/reasonable + cause). The one defence is that you are refused the injunction, but you still get something else. Which is why it's acceptable to take these other considerations into account.

3. Ordinary Injunctions to Protect Against Trespass to LandGoodson v. Richardson (1874), LR 9 Ch. App. 221

Facts. Unhappy with the waterworks, Richardson started laying pipes next to the highway, adjacent to Goodson's land. Goodson –who was also a shareholder of the waterworks company– asked for a permanent negative injunction and mandatory injunction to remove pipes that were passing under his land. Issue. Did he get it?Holding. Yes. Reasoning. Selborne LC. This is a clear case of trespass on its classic definition, i.e. a deliberate and unlawful invasion of another person’s property in order to gain a benefit without the owner’s consent: you don't need a wrong (well, the wrong is that you have a right to only get what you want on your property). it was. Plus the pipes were laid down really fast, so it's probably not too onerous to order them removed. Ratio. Comments. Interesting that the Courts are to oblige the defendant to remove the pipes (pretty mandatory) but keep referring to it

in negative terms (not putting pipes). It's not causing harm in the pipe laying sense (perhaps in terms of competition, but that's irrelevant). And it's true

that he knew he was trespassing. But for the rest, we can read arguments backwards: the court says "if the def. is reasonable/pf. unreasonable…", time passing (latches/delays), finished/continuing trespass, etc. Quite often, the

86 Cost to defendant unless defendant was a really bad boy (then, we don't care, let's milk the bastard).

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court say that smthg isn't the case here, so it's a had int been argument (that's an ugly turn of phrase). → point is: there are not clear-cut questions, it's always a weighing of different points.

From Yems: As lawyer for dft, you could try to argue (like we saw in Woollerton): 1) balance of costs (e.g. it would be very expensive to rip up the pipes, which would support the dft’s case – but this may be difficult to argue on these facts since he did it knowing it was the ptf’s land); 2) the dft was acting reasonably wrt the ptf (e.g. you thought it was your own land, which happens all the time; difficult to argue on these facts). If these arguments were successful, then you’d have to pay damages the court would order for a purchase of the land and redraw the boundaries btwn the two properties it would be a forced sale between the parties.

Woolertain and Wilson v. Costain, [1970] 1 W.L.R. 411 (Ch.) Facts. RC was doing some construction work next to W&W and a crane kept swinging 50 ft. over the roof of W&W's plant. Trepass! RC offered 250£ to permit the trespass, but W&W refused and sought an injunction. Issue. Can they get it?Holding. Yes, but only after the construction is finished. Reasoning. Stamp J. Trespass is a "strict liability" tort in the sense that, unlike nuisance where if the injury is minor, there will be no remedy, there needn't be damage. The injunction is a more appropriate remedy than "compensation" for nothing. However, it wouldn't be equitable to punish such a good faith plaintiff. «(1) If the injury to the plaintiff's legal rights is small, (2) And is one which is capable of being estimated in money, (3) And is one which can be adequately compensated by a small money payment, (4) And the case is one in which it would be oppressive to the defendant to grant an injunction: -- then damages in substitution for an injunction may be given. »Ratio. Injunctions can be suspended if they are too onerous (esp. for reasonable defendants) even if the plaintiff has a right. Comments. Rules on trespass are really strict: if you trespass, even if no harm is done, you get an injunction. But the injunction

was trickily suspended… -- clearly, the courts would like not to grant the injunction, say this is not a case of trespass. Some jurisdictions have law trumping this all-trespass rule87.

It's interesting that the suspension is only granted because the defendant recognised he was trespassing (by asking permission, etc.).

Trenberth v. National Westminster Bank (1979), 39 P & CR 104 (Ch.) Facts. Bricks were falling from NWB's building onto the public road. To repair the building, they had to trespass on Trenberth's property. They tried to reach an agreement but Trenberth always refused. It was not about the money, he simply did not want his land to be walked upon. So the NWB deliberately trespass. Issue. 1. Did Trenberth get his injunction? 2. Did NWB get a suspension like in Woollerton?Holding. 1. Yes. 2. No.Reasoning. Walton J. The lack of agreement was, so to speak, of good faith, and the fact that no harm was caused it not an excuse to go on other people's lands. And Woollerton is not good law anymore: there is no reason not to enforce negative injunctions as soon as they are ordered. Ratio. Comments. Why the difference with Woollerton? Perhaps because there was another possibility, though more expensive. Not

sure, you could have redesigned the building (as costly). This being said –and we don't have facts–, in Woollerton, it's a guy, in NWB, it's a bank!

One reason: equity is on a case-by-case basis, so don't except uniformity. Is there offer & acceptance is a yes/no question, but is this painting beautiful involves a weighing of factors.

SS: Equity is not the only reason. Should courts really be looking at the relative costs and the behaviour of the parties?

Also, the injunction is a declaration of the rights of a person, and in that sense and in the absence of damage to property, it is like a nominal injunction.

4. Ordinary Injunctions to Prevent a NuisanceMiller v. Jackson [1977] 3 All E.R. 338, [1977] QB 966 (CA)

87 Quebec would be a bad example of this. Pickles (or something that sounds like that) was the guy on whose land was the source of the village's water. Clear abuse of right, he “took it hostage” and asked that the city pay him money to keep on feeding the city system. And he won.

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Facts. Cricket has been played in a particular field since 1905. In 1972, a house was built on the adjoining field. The Millers moved in. They have then been attacked by balls from the cricket field (damages to the house and fear). They complained to the Club. The Club agreed to pay the damages, and even put up a extra fence on the already 6-foot tall wall –the structure almost reaching 15 feet. Since balls continued to fall in the garden, the Club offered extra solutions, but the Miller refuse, and went to Court for an injunction and damages for nuisance. Issue. 1. Did the Club creating a nuisance for the Miller? 2. Should the remedy be an injunction?Holding. 1. Yes. 2. No.

Reasoning Is there nuisance? Should injunction be the remedy?Lane Yes.

There is a risk of (physical) injury. o "The evidence makes it clear that the risk of

injury to property at least was both foreseeable and foreseen [R. 359]": it has never been pleaded before because you cannot claim ECO if there is no injury.

Coming to the nuisance (rejected).

Yes. Consequently Lane J. wanted

an injunction but only when the cricket Club will have found somewhere else to play.

Cummings Bruce Yes. Agrees with Lane. There is a nuisance because balls fell like

thunderbolts (i.e. unpredictable).

No. Interest of the public, so the plaintiffs are only granted damages and there is no injunction.

Denning No. Issue of public interesto The utility of the activity is so great that it

cancels out the nuisance. The cricket is a green space (protection of the environment), and it occupies the youth88.

Coming to the nuisance.o Cricket had been played for the past so many

years prior to the building of houses (the cows previously there had not been annoyed by the balls). He says that what was not a nuisance before cannot be a nuisance now (today, this has clearly been overruled).

Balancing exercise. o Prioritize the cricket club and rather hard on the

plaintiffs (take the offers or move).

No. Same: interest of the public,

so the plaintiffs are only granted damages and there is no injunction.

Ratio. Where there is nuisance, an injunction may not be granted if the source of the nuisance is a greater good than the rights being infringed on (public utility trumps private annoyance). Comment. SS: this is a bad judgement. Of course, it's a lord Denning judgement. But he says there is no nuisance, and then

says it's not a question of damages [C. 89], so not about injunction (but this is unnecessary if there is no nuisance), and then says the club must grant whatever it offered the family (why grant damages if there is no nuisance?).

Cumming Bruce's judgement is a good illustration of how there isn't always an injunction when there's a nuisance.

Boomer v. Atlantic Cement, (1970) 257 N.E. 2d 870 (NY CA)Facts. Atlantic has a cement plant near Albany and the dirt, smoke and vibration are a nuisance to the neighbours (the fact that it's a nuisance is not disputed). In first instance, temporary damages were granted, but injunction was denied. Issue. What remedy should be granted?Holding. Permanent damage (like a servitude) instead of an injunction. Reasoning. Majority (Bergan J.) Is this a public welfare question or is it strictly a private matter? «A court performs its essential function when it decides the rights of parties before it. Its decision of private controversies may sometimes greatly affect public issues. Large questions of law are often resolved by the manner in which private litigation is decided. But this is normally an incident to the court's main function to settle controversy. It is a rare exercise of judicial power to use a decision in private litigation as a purposeful mechanism to achieve direct public objectives greatly

88 Contra Huntingdon.

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beyond the rights and interests before the court.» Closing down the factory means the loss of 300 jobs. Removing the nuisance is thus not an option. Instead, Atlantic will have to pay for the damages, and since the damage is permanent, so will be the damages (it's pretty much like buying the right to pollute). Dissent (Jasen). But that's a license to continue the wrong! The injunction should be granted, with a suspension of 18 months for Atlantic to find a less polluting method. Ratio. Permanent damages (i.e. a forced purchase of a servitude or right to pollute) may be granted where the loss recoverable would be smaller than the cost of removing the nuisance (in social, commercial and economic terms).Comments. Hard to find Canadian cases like this, the nuisance is usually very trivial (here it's not that trivial). But it's a sort of expropriation (the servitude), this sale of the right of access over the land 89. It's really a calculation

(the cost of the plant/of the pollution)90. The judge does try to quote cases, but they are all about public company (right of way, railway), and Courts (at least in the State) are always reluctant to grant injunctions against public company in the name of public utility (so, they are authorities, but on another category). Thenagain, economic theory sees the injunction like a big tax.

The economic analysis takes place on two levels. The court does a cost/benefit analysis and assess that the value of the property going on is greater than the annoyance of the pollution (of course, in our case, there was no moral value). Here the damages are sort of an incentive to act cautiously and not pollute too much (because should you tip the balance and make the annoyance greater, you'd get an injunction).

Spur Industries v. Del E. Webb Development, (1972) 494 P.2d 700 (Ariz. SC)Facts. DEWD's feed lot stinks. Spur decides to buys nearby land. Complains that smell discourages potential purchasers (that's sooo a coming-to-the-nuisance). Note also that, it so happens that the feedlot doubled in size. Issue. 1. Is it a nuisance? 2. Should an injunction be granted? 3. Does the coming to the nuisance matter?Holding. 1. Yes. 2. Yes. 3. Yes.Reasoning. Cameron VJ. Usually, people coming to the nuisance are not compensated. But this is only because they are the only one annoyed. Here, the feed lot stinks for everyone. And Spur didn't get any tax break for buying there. However, the courts must be fair: even if it is indeed a nuisance, and that an injunction will be granted, this means the feedlot, which was completely passive, will be shut down. So the courts will order Spur to pay damages (otherwise, they'd only profit for something that was a bit their fault).Ratio. When a developer buys land in an agricultural or industrial area knowing that people who move there will be subject to a nuisance that was not a nuisance before, they will be required to indemnify the cause of the nuisance for forcing them to leave.Comments. About the coming to the nuisance, Spur is not the only one annoyed by the smell (which explains why it's not a

Miller v. Jackson situation), there are also all the home owners91. So the injunction is granted, but the defendant has to pay for it (buying the right to expropriate, that's very

private/economic). Canadian courts are a more conservative on their remedies and probably wouldn't give an order against two people who haven't done anything wrong (the defendant is granted an injunction against and the plaintiff has to pay92).

Courts as urban planners! They are obviously creating new rights, but there was no breach. Remedial right from a non wrong.

SS says this seems like the right conclusion, but how to explain it? Thinks what is really going on is legislation (i.e. courts doing what the legislator should have done).

C. DELIVERY UP OF GOODSCohen v. Roche [1927] 1 K.B. 169

Facts. Auctionner Roche circulated a catalogue saying that he would sell given stuff at a given date. He made a mistake and sold Cohen as a buyer for a set of Hepplewhite chairs for 60£ by writing him down I his book. He refuses to deliver them to the plaintiff, who is suing for breach of s. 4 of the Sale of Goods Act, 1893

89 But it's not that pure Law & Economics, I mean, you can be forced to sell part of your mitoyen wall, can't you?90 But judges are partly elected in this state so…91 Though I don't really see how it's different –I mean, didn't they visit before buying? Unless they all had colds. And didn't they realise the prices were cheaper?92 Note that in the end, it's almost like giving the choice: you can pay and have them move or not do anything. Imagine this generalised to torts: I can run you over but pay; or economic rationality of paying your big neighbour to leave.

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Action for the delivery up of the goods (detinue: a form of action which exists for the recovery of personal property (or their alternative value) from one who acquired possession together with damages for the detention)Issue. 1. Is there a valid contract? 2. Can the Cohen force Roche to deliver the chairs?Holding. 1. Yes. 2. No. Damages for breach of contract will suffice. Reasoning. 1. The note in Roche's book was sufficient to create an enforceable contract between the parties. 2. However, the chairs are “ordinary articles of commerce and of no special value or interest” and as such, the court shouldn't exercise its discretionary power to order specific performance of the contract. Which is why he didn't sue for that. Ratio. Here, the courts decide that the rule for specific performance is the same as for delivery of goods93. Comments. SS thinks it's a good thing that they didn't try SP because they were bound not to get it, and that if they tried delivery of goods, it's because they thought that a brand new legislation might have an incidence (action for debt move or smthg that gave you a right to either-or, but the def. had the choice) and it didn't. Equity courts would only order the delivery if the goods were unique.

Courts of Justice Act, R.S.O. 1990, c. C.43, s. 104(1)

Interim order for recovery of personal property      104. (1)   In an action in which the recovery of  possession of personal property is claimed and it is alleged that the property,         (a)    was unlawfully taken from the possession of the plaintiff; or         (b)    is unlawfully detained by the defendant,the court, on motion, may make an interim order for recovery of possession of the property

Rules of Civil Procedure, R.R.O. 1990 reg. 194, s. 44.01(1)

Motion for interim order      44.01     (1)   An interim order under section 104 of the Courts of Justice Act for recovery of possession of personal property may be obtained on motion by the plaintiff, supported by an affidavit setting out,         (a)    a description of the property sufficient to make it readily identifiable;         (b)    the value of the property;         (c)    that the plaintiff is the owner or lawfully entitled to possession of the property;         (d)    that the property was unlawfully taken from the possession of the plaintiff or is unlawfully detained by the defendant; and         (e)    the facts and circumstances giving rise to the unlawful taking or detention.  R.R.O. 1990, Reg. 194, r. 44.01 (1).      (2)  The notice of motion shall be served on the defendant unless the court is satisfied that there is reason to believe that the defendant may improperly attempt to prevent recovery of possession of the property or that, for any other sufficient reason, the order should be made without notice.  R.R.O. 1990, Reg. 194, r. 44.01 (2).

Curwen, “DETINUE AND CONVERSION” (2007) [SEE PDF]The common law never developed an effective action fort he recovery of goods, and trying to go around

it created a weird mess between both tort law and property law. Detinue is an ancient action for the recovery of goods: the remedy is an order that the def. return the

goods or pay their full value to the claimant. Today, it seems weird that a proprietary claim give rise to a personal remedy, but Maitland explains that it didn't matter back then because debts were often settled in nature.

However, the problem with detinue is that it was subject to the wager of law, which eventually became a license to perjury. This result was undesirable so lawyers dug up the action in trover (now conversion), which was an action in trespass on the case for the conversion of goods (intentional tort to personal property, where defendant's unjustified willful interference with the chattel deprives plaintiff of possession of such chattel.).

However, in the C16, you had to make sure your claim couldn't be framed as a detinue if you wanted conversion. In practice, this meant the plaintiff has to let go of the proprietary claim. This was even

93 “The power vested in the Court to order the delivery up of a particular chattel is discretionary, and ought not to be exercised when the chattel is an ordinary article of commerce and of no special value or interest, and not alleged to be of any special value to the plaintiff, and where damages would fully compensate”

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“officialised” in Isaack v. Clark where Dodderidge J suggested that a “refusal by the defendant to return he goods was evidence that they has converted them to their own use and thereby changed the property in them”. This was perhaps a little strong theoretically but it enabled the change. Eventually, the rule changed and it was accepted that the plaintiff didn't lose his proprietary interest even if we was asking for payment of the full value.

Of course, conversion was equally inadequate with respect to specific goods. So equity courts barged in, ordering delivery up where necessary. In 1854 common law courts were given similar discretion and started ordering the delivery up of goods where the goods had been unlawfully detained. In 1977, detinue was abolished and replaced by conversion (conversion required intention, now negligence would suffice as it did for detinue).

As a result, defendants could be granted three remedies: (1) delivery up + consequential damages; (2) choice of delivery up or payment of full value + consequential damages; (3) damages. Plaintiff could chose between (2) and (3) and courts had the discretion to grant (1) instead.

The problem of conversion, is that some say it's too proprietary, others, not enough.

D. EJECTMENT (RECOVERY OF LAND)McPhail v. Persons Unknown [1973] 1 Ch 447 [R.]

Facts. Squatters94 had broken into empty houses. The owner wanted them out, to "recover possession" (action in ejection). On appeal, the squatters sought stays of execution. Issue. Can they stey?Holding. No. Reasoning. The squatters were guilty of both a criminal offence and a civil wrong and in such circumstances the courts of common law never suspended an order for possession and the courts of equity never intervened to aid a wrongdoer Ratio. The action in ejection is against trespasser and this is a strict liability offense, so the court has no discretion to suspend the order. Comments. Note that ejection can be a self-held remedy. But seeking the help of the courts may be neater.

E.AWARD OF A SUM DUE UNDER A CONTRACT1. DebtSmith (STEPHEN), EXCERPT ON “ACTION FOR AN AGREED SUM” FROM ATIYAH’S INTRODUCTION TO THE LAW OF CONTRACT 6TH ED. [R.]

The action for an agreed sum. The victim of the breach of a monetary obligation may bring what is called an ‘action for an agreed sum” (or action in debt), to obtain a specific performance of the monetary obligation. It looks like a damage-order because it's about, but it's about a specific amount of money; however, they are not equivalents because the claimant in damages must prove that the failure to pay caused him a direct loss whereas in an action for an agreed sum, the claimant need only prove that the sum was due and not paid and the procedure is simpler. Note that even if it is an equitable remedy (it is specific performance), it is available as of right and not merely in cases in which damages are an inadequate remedy.

Of course, the claimant must have perform his duties. “You cannot claim remuneration under a contract if you have not earned it; if you are prevented from earning it, your only remedy is in damages”. 95 Note that the possibility of bringing a restitutionary claim for the value of benefits conferred under an incomplete contract also exists where the reason for non-performance is that the contract was frustrated.

All this being said, you should, on top of the order for payment/execution of contract, get damages to failure to pay an agreed sum. However, this rule doesn't seem to be applied.

White and Carter (Councils) Ltd. v. McGregor, [1962] A.C. 413.

94 Denning LJ definition of a squatter: “What is a squatter? He is one who, without any colour of right, enters on an unoccupied house or land, intending to stay there as long as he can. He may seek to justify or excuse his conduct. He may say that he was homeless and that this house or land was standing empty, doing nothing. But this plea is of no avail in law. As we said in Southwark London Borough Council v. Williams  [1971] Ch. 734, 744: ‘If homelessness were once admitted as a defence to trespass, no one's house could be safe. … So the courts must, for the sake of law and order, take a firm stand. They must refuse to admit the plea of necessity to the hungry and the homeless: and trust that their distress will be relieved by the charitable and the good.’”95 Per Lloyd J in The Alaskan Trader [1984] 1 All ER 129 at 134.

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Facts. W&C were selling advertisement on the city's garbage bins. McGregor contracted with them for three years of advertisement, but soon (i.e. before the ads were actually placed and thus payable because the installments were due after advertisement) their mind and repudiated the contract. W&C refused the repudiation and went on with the ads anyways (didn't even look for alternative advertisers) even if McGregor told them he wouldn't pay. W&C are suing for performance. Issue. Should specific performance (action for an agreed sum) be due?Holding. No. Reasoning. Reid & Hodson LJ. Repudiation of contract for no reason by one party cannot be imposed on the other, which can accept the reputation and sue for damages for breach of contract or refuse it, in which case the contract remains fully executable. However, the refusal of the reputation must be made with a good reason, as was not the case here. If there is no good reason, the courts will not order specific performance, only payment of damages if damage occurred (and there's a duty to mitigate). Keith of Avonhold (dissenting). Repudiation is repudiation and going on is not mitigating one's losses. Ratio. Though he can accept and get damages, an innocent party may rightfully refuse a wrongful repudiation of the contract by the other party, in which case the contract will survive (and he might get specific performance). If the refusal is not legitimate, then, he will only get damages (and the duty to mitigate applies). Comments. The mitigation of damages clause raised interesting questions. It does like unfair not to ask of W&C that they

mitigate their damages by looking for another advertiser, but it is not for damages that W&C is claiming but for specific performance: they just want the other party to do their part – and for that, they need to have done theirs. So it's logical!

Also, one might argue that they have indeed mitigated their damages in the sense that putting this advertisement was advertisement for them. And there is not way they could have proved "loss of reputation" as a head of damages (not clear enough for the courts).

The Court seems to suggest that they will not enforce the contract if the other party has no legitimate interest in performance. A lot of distinguishing has been done on this basis.

And anyways, it's not an equity remedy, so you can't claim clean hands.

2. Stipulated Damages ClausesSmith (STEPHEN), EXCERPT ON “AGREED DAMAGES CLAUSES” FROM ATIYAH’S INTRODUCTION TO THE LAW OF CONTRACT 6TH ED. [R.]

The parties sometimes negotiate what will happen in case of breach of contract. Such agreements are usual valid as long as the clause talks of compensation (“liquidated damages”) and not punishment. If the court thinks that the sum is a penalty, it is not recoverable. The innocent party is then left an ordinary claim for damages to be assessed by the court in the usual way.96

Agreed damages will be classified as liquidated damages (and thus enforceable) only if it is a genuine pre-estimate of the expected loss, an ex ante test. This being said, courts are clearly influenced by the severity of the loss. Common sense principles include: if sum is way higher than worth of probable breach, or if it's always the same no matter the breach, if the payment delay is very short, it's prima facie a penalty.

The rule against penalties is an old equitable principle. However, some people claim that it's an infringement of the freedom of contract, or that it may hinder business practises97

Courts however continue to look at them closely because people don't really pay attention to these clauses. In ECGD v. Universal Oil Products Co.98 the House of Lords insisted that the penalty rule is only applicable to a sum of money payable on a breach of contract, and has no application to a contractual clause which provides for an agreed sum to be paid on any other contingency. In this case the claimants only sought to recover their actual losses, so the actual claim was unobjectionable; but the defendants argued that, if the clauses in question were enforceable, there might be other circumstances in which sums vastly in excess of the claimants’ losses could be recovered. It's a little formalistic.

Is the part on forfeiture important?

F. SPECIFIC PERFORMANCE AND INJUNCTIONS1. Introduction

96 Penal clauses are also found in the list of prima facie suspect clauses in Schedule 2 of the Unfair Terms in Consumer Contracts Regulations 1999; see supra, ##.97 Such as the common practice whereby pizza-delivery companies promise a free pizza if delivery is even one minute late, offered as a proof of the business's trustworthiness. 98 [1983] 1 WLR 399.

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Smith (STEPHEN), EXCERPT ON “SPECIFIC PERFORMANCE AND INJUNCTIONS” FROM ATIYAH’S INTRODUCTION TO THE LAW OF CONTRACT 6TH ED. [R.]

The traditional rule is to the effect that you can't force SP, even if there's a breach of contract, but must rest content with monetary compensation.99 SP (positive obligation) or injunction (refrain from something) will indeed be granted only where damages would be an inadequate remedy (which fits with the fact that they are discretionary equity products that cannot be claimed as of right –and that can also be subject to the equitable bar/clean-hands doctrine). «For instance, specific performance is granted virtually as a matter of course for the enforcement of contracts for the purchase and sale (or lease) of land and buildings (though one modern case100 shows that the old discretion to refuse specific performance on grounds of personal hardship remains alive). Similarly, injunctions to enforce negative covenants, such as post-employment non-competition covenants, are regularly awarded, though here too the equitable bars may be raised in an appropriate case.101 On the other hand, specific performance is never granted to enforce performance of a contract for the sale of ‘fungible’ goods—goods that are readily obtainable elsewhere.»

SP remedies are available under three conditions:(1) only if damages are inadequate, e.g. contract for the sale of something unique because the plaintiff has a right

to what was promised under the contract and that this can only be granted by the plaintiff. This means that the damages otherwise granted do not seek to compensate but rather to have the plaintiff get the wanted performance out of a third party (even if the common law doesn't explicitly acknowledge this). «By definition, giving the victim funds to enter an identical contract with someone else (plus an amount to cover incidental expenses) ensures that she is left as well-off at the end of the day as if the original contract had been performed.»102

This being said, there is a tendency to expand the concept of "adequacy": see Beswick. (2) they will not be granted for contracts involving personal service (e.g. portrait painting or contract of

employment) because that would be akin to slavery. However, contracts not to do are often enforced by means of an injunction (unless this injunction would offer the defendant little choice but do it, e.g., work for me or starve).

This being said, does the personal liberty argument still holds against corporations or employers. Cases were the employee's self-esteem or integrity are at stake with the job might not ever be adequately compensated by a mere award of money.

(3) courts only grant SP when they are certain it'll be executed. Of course, it's hard to supervise specific relief (by supervise, we mean, not have to make many other orders103)

This being said: should specific relief be more widely available? I mean, don't parties have an obligation to perform? Yes, but what about having lost confidence in the order party (or courts proceedings having taken so much time it's too late for specific performance)? Maybe the answer is simply historical: as a Chancery remedy, it is considered a secondary remedy. But North-American authors like to take the view of the economic efficiency. «According to the theory of “efficient breach” […], SP is not routinely available because there are cases in which it is efficient for contracting parties not to perform their contract104.» [See notes]

99 Unlike some civilian legal systems, Engligh law has not traditionally permitted the victim of a contract breach to choose, by way of remedy, to pay a reduced price for defective goods or services: the victim’s choices are limited to damages, specific performance, or (if the breach is serious) to refusing the goods or performance and demanding the return of the entire price (if it is has already been paid). Under Part 5A of the Sale of Goods Act 1979 (implementing Directive 19994/44 of the European Parliament), however, a consumer is now given the choice of requiring a seller of defective good to reduce the price by an appropriate amount.100 Patel v. Ali [1984] 1 All ER 978.101 In Shell v. Lostock Garage [1976] 1 WLR 1187 the Court of Appeal refused an injunction to restrain the defendant from buying petrol from other suppliers in breach of its contract with Shell. The reason for the refusal was that Shell was supplying other rival petrol stations with petrol at much lower prices, with the consequence that the defendant was unable to resell the petrol Shell sold him.102 In Sky Petroleum v. VIP Petroleum Ltd, [1974] 1 WLR 576. the courts granted a decree of specific performance of a contract to supply petroleum. The dispute arose during an oil crisis, and the court suggested that an order of specific performance was appropriate as it was not clear that the claimant could obtain alternative supplies at any price. But it seems clear that anyone willing to pay £1,000,000 a barrel would have had no difficulty obtaining all the oil he wanted. The real difficulty, it appears, was that oil prices were rising and falling so dramatically and unpredictably that it was impossible for the court to determine the appropriate level of compensation.103 In Argyll Stores, f.ex., a court refused to grant a shopping center owner an order that would have obliged the owner of a supermarket to stay open at certain hours. 104 Case at hand: Tito v. Waddell (No. 2). The defendants were liable under some contracts which required them to restore the condition of the claimants’ land (on an island in the Pacific Ocean) after it had been exploited for phosphates.

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«The common law’s view that specific performance is presumptively a secondary remedy arguably makes it too easy for courts to refuse such orders. At present, the party seeking specific performance has the burden of proving that damages are inadequate.» One of the downside of this is that courts don't recognise subjective (that is, non pecuniary losses).

Beswick v. Beswick, [1968] AC 58, [1967] 2 All ER 1197, [1967] 3 WLR 932 (HL) [R. X]Facts. Old Peter Beswick was a coal merchant. Sold his business to his nephew with a clause saying he'd provide for his wife after his death. Of course, he died and the nephew stopped paying his aunt. She sues, both personally and as administratrix of her deceased's husband's estate.Issue. 1. Can she get anything personally? 2. As the administratrix?Holding. 1. No. 2. Yes. Reasoning. Upjohn. 1. Privity of contract! She has nothing to do with the contract the nephew is not honouring. 2. If he were alive the uncle would have no problem enforcing the contract: he's done everything he had to done! It can't be any different now – so the remedy of specific performance must have passed on to the widow. Since there was a wrong committed but the estate didn't suffer any damage from the lack of performance (the guy is dead), the nephew's lawyer contends there should only be nominal damages. But the court says SP is more adequate (fairer in the circumstances). And SP is more adequate than damages because the estate Ratio. SP was granted here because it was more adequate than damages, though damages were not inadequate (as the widow would have been compensated the same). Comments. On a SP point of view, it's very liberal a view. Usually, it's a unique good or land. Commentators said it looked like civil law. Courts are slowly picking up on this new rule. Is this case inconsistent with the rest of the law? I mean, we are going around the privity of contract. And there is a possibility to give damages. Remember that the point of granting damages is so you can get on your own what you were supposed to get (+ compensation if need be). But here, performance is paying her the money, it is having what she wants done. So maybe in a weird way, it's consistent.

2. Sale of GoodsFalcke v. Grey (1859), 4 Drewry 651, 62 E.R. 250 [R.]

Facts. Grey has two china jars. Falcke agrees to buy them for 40$ at a given date. In the meantime, Falcke has the jars appraised by Watson, who offers her 200$. Issue. 1. Can Falcke get the vases (SP)? 2. Can he get damages? 3. Can Watson be liable?Holding. No.Reasoning. SP should only be granted for unique goods – the vases were unique but Falcke tried to trick Grey into thinking they were worth less (dirty hands – equitable bar). This being said, there was a breach of contract, so Grey will pay damages. Watson would only be liable if he knew or had notice of the other contract, which was not demonstrated. Ratio. Only if the vase is unique can you get SP (infongibility, like for land). Comments. Where is the unfairness exactly? In the objectively wrong price or in the subjective knowledge in plaintiff of unfair price. Usually, knowledge is required to invoke an equitable bar but here, court suggested it didn’t matter, which intuitively makes sense (if someone does wrong without thinking what they do is wrong, the should be liable).

3. Sale of LandSemelhago v. Paramadevan, [1996] 2 S.C.R. 415 [R.]

Facts. Paramadevan was to sell Semelhago a house under construction at the moment the contract was formed. Paramadevan ended up selling the house to a third party (breach of contract). Semelhago sues in SP, alternatively damages (as per Lord Cairn's Act). Note that at the trial date, the values of all house (Semelhago's own and the one he was to buy) has increased a lot.

In fact they left the land in a deplorable state, but it was proved that the cost of actual restoration would have been enormous—it would have involved shipping loads of soil from Australia—and would have far exceeded the value which the land would have after restoration. For reasons unrelated to the mining, the island had become uninhabitable—the islanders were forced to relocate—with the result that replanting would have been of little value to them or anyone else. In these circumstances, the court refused to award specific performance. The result appears to support the arguments of the efficient breach theory. Assuming the court had the facts correct, restoring the island to its original state would have been hugely wasteful. Had the islanders simply been given a sum of money equivalent to the cost of restoration (which did not happen, for reasons explained below), it seems clear that they would not have used it for this purpose. They would have used the money for something on which they placed a higher value.

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Issue. Should SP be granted to Semelhago?Holding. No.Reasoning. Sopinka. The traditional rule is to the effect contracts for pucharse and sale of land warrant SP. The SCC reverses that and brings it to the personalty rule of the uniqueness: the purchaser must prove the real estate he wanted is indeed unique. And since it's not unique, he should have mitigated his losses105. Ratio. The purchaser has the burden of proving the property is unique (i.e. warrants an SP). Rule of SP of land is reversed. Comments. The threshold of SP is set very high (what makes a land unique is not clear). But, but, I seem to remember from secured transactions that as soon as you sign the contract, you have the equitable title and can thus mortgage.

4. Other Non-Personal Obligations ‘To Do’Tanenbaum v. W.J. Bell Paper Co. Ltd., [1956] O.R. 278[R.]

Facts. Bell bought a land from Tanenbaum and covenanted to build a road to access Tanenbaum's land and put a water pipe, but this was realized after a delay and everything was smaller than expected. The delay barred Tanenbaum from making certain steel operations, the course of steel dropped and he incurred a loss. Issue. Should Tanenbaum get SP?Holding. Yes.Reasoning. Gale J. Court generally will not order specific performance of a contract to build, unless the works to be undertaken were part of the deal for getting the land on which they are. Of course, the nature of the works must be reasonably clear and defined and damages cannot be an option. Here, the court thought there would be more injustice in not giving SP than it would be hard for supervise106 Ratio. If a person undertakes to do work on lands possessed by him in consideration for obtaining those lands and if the particulars of the work are sufficiently clear and defined (with reasonable certainty), then damages would not be an adequate remedy. In order words, this is an exception to the no to-do orders rule.Quote: Mayor, Aldermen and Burgesses of Wolverhampton v. Emmons, [1901] 1 Q.B. 515, p. 524, Romer L.J.: «There is no doubt that as a general rule the Court will not enforce specific performance of a building contract, but an exception from the rule has been recognised. It has, I think, for some time been held that, in order to bring himself within that exception, a plaintiff must establish three things. The first is that the building work, of which he seeks to enforce the performance, is defined by the contract; that is to say, that the particulars of the work are so far definitely ascertained that the Court can sufficiently see what is the exact nature of the work of which it is asked to order the performance. The second is that the plaintiff has a substantial interest in having the contract performed, which is of such a nature that he cannot adequately be compensated for breach of the contract by damages. The third is that the defendant has by the contract obtained possession of land on which the work is contracted to be done.»Comments. SS: feels the real explanation here is that these particular construction K’s will occur on Def’s land, not Plf’s, so no matter how many damages you give Plf, he won’t be able to use it to build the connection without Def’s permission In normal damages award, the calculation would be cost of getting someone else to do it (plus delay cost) – but, here, impossible .

Co-Operative Insurance Society Ltd. v. Argyll Stores (Holdings) Ltd., 1998 AC 1 (UK, HL)Facts. Safeway owns a supermarket in COIS's shopping mall. They have a 35 years lease. Safeway decides to close after a few years of losses. COIS demands specific performance. Issue. Is SP appropriate? Holding. Yes (CA). No (HL). Reasoning. CA. There is a clear obligation under the contract. Also, closure of Safeway doesn't only create a loss of COIS, but also for all the other businesses in the shopping mall. Damages would be inadequate in this case. HofL. Third parties are irrelevant. Performance will not be granted where it is too difficult to supervise (courts are not going to check store hours, to see if the display window is full, is there is more than one cashier, and it wouldn't be efficient to repeatedly ask for orders to comply). About the personal nature of the contract, it's not that personal: BECAUSE?Ratio. Comments. Though UK-case, this is probably the most important case in common law Canada since Beswick. And it's nice because in Quebec, there was the same problem (Propriété Concordia) but the result that the opposite! This being

105 What a vicious circle! If he mitigates by buying a replacement house, he proves that his property is not unique. If he waits and still doesn't get SP, he'll be penalized for not having mitigated!106 Syntax…

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said, until the UK CA, the result has been the same. This being said, it's a landmark case not because it departs, but rather because at the time people thought here might have been a departure and this just put an end to the speculation. Question de discrétion. This being said, never in SS's memory as the HofL said "we disagree but this is a discretionary matter". Au-delà de l'idée de l'esclavage (probalbement pas utilisé pcq compagnies). Il y a aussi l'idée que SP est un ordre qui amène, en cas de contravention, l'outrage au tribunal. Et c'est un peu lourd, des fois, surtout si on ne sait pas ce qu'il y a comme breach. D'un autre côté, si tu sais que toute violation fait de toi un criminal, il risque de ne pas y avoir de breach. C'est un peu prendre le defendant en otage.

5. Personal Obligations ‘To Do’Lumley v. Wagner (1852), All E.R, 368 [R.]

Facts. Wagner said she'd only sign at Lumley's place for three months. She wants out. Issue. 1. Can Lumley get SP to force her to sign? 2. Can he get an injunction to prohibit her from signing elsewhere?Holding. 1. No. 2. Yes. Reasoning. Court can't force her to sing, doesn't have jurisdiction. Can't force her to respect her contract, can only make sure she won't breach it (by signing at another theater). Ratio. Court will enforce a negative covenant but not a positive covenant, even if there's no real difference between injunctions and SP at times.Comments. C'est un peu hypocrite.

6. Obligations ‘Not To Do’Warner Brothers Pictures Incorporated v. Nelson, [1937] 1 K.B. 209 [R.] 107

Facts. Il existait entre la Warner Brothers et Betty Davis (Nelson) un contrat d'exclusivité (donc, clause de non-concurrence) sur trois ans. Afin de briser son contrat, elle s'en va à Londres, faire affaire avec une autre production. La Warner demande une injonction mandatoire pour la forcer à revenir faire des films aux États-Unis et une action prohibitoire pour l'empêcher de faire des films avec d'autres producteurs que ceux de la Warner.Issue. Peuvent-ils obtenir 1. l'injonction mandatoire? 2. l'injonction prohibitoire?Holding. 1. Non. 2. Oui. Reasoning. Branson J. L'injonction mandatoire comporte une obligation de faire, en nature, ce qui est contraire à l'ordre public: elle devra être compensée pécuniairement, mais elle ne peut être accordée. L'injonction prohibitoire est négative: elle est accordée parce que si l'on ne peut empêcher quelqu'un de travailler, on peut l'empêcher de travailler pour autrui. Les dommages-intérêts ne sont pas appropriés parce qu'on ne peut pas spéculer sur le montant qu'elle aura. Ratio. Comme d'habitude, la Cour cherche à restreindre les interdictions de travailler.Comments. L'argument portant sur l'inequality of bargaining power (avec un tel contrat de non-concurrence, WB aurait pu lui refuser tous les roles et ainsi ruiner sa carrière) et le unconscionability a été rejeté.

7. Equitable DefensesRiches v. Burns, [1924] O.J. No. 343 [R.]

Facts. Riches bought a land from Burns and was given the option to buy an extra 50 feet for one dollar. He agreed, never paid or intended to. When Burns started building on this land, Riches sued him. Issue. Can Riches get SP?Holding. No. Reasoning. If a K is established under seal or without valid consideration (e.g. a nominal amount, such as in this case), SP will not be awarded in case of breach.Ratio. Equity will not Aid a Volunteer: if you haven't given consideration for what you claim is yours, courts won't grant you SP (but you can ask for damages) Comments. The rule simply is that if the party didn’t pay for the goods, then their rights are weaker.

Cadbury Schweppes Inc. v. FBI Foods Ltd., [1999] 1 S.C.R. 142 [R.] Facts. Duffy-Mott licensed its trademark Clamato and the (confidential) formula to Caesar Canning. Caesar Canning contracted with FBI foods and gave it the confidential formula as well so they would be able to work. Cabdury bought Duffy-Mott, terminated the agreement with Caesar Canning and had a non-concurrence clause about Clamato juice. Nothing about FBI foods. Caesar Canning used the formula to work recreate a similar product (minus the clam).

107 From first-year contracts because I'm lazy.

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Cadbury knew about this but didn't do anything (thought the absence of clam would prevent the infringement). Caesar Canning went bankrupt and FBI bought its assets. Cadbury reassessed the situation and decided to sue. Issue. Can a permanent injunction be granted?Holding. No. Reasoning. SP was denied because (1) it took the plaintiff an unreasonably long period of time to assert their claim; (2) the information being used was “not very special,” which the court held demonstrated prejudice against the defendant; and (3) damages were adequate.Ratio. Latches (delays) might bar you from claiming.Comments.

Patel v. Ali, [1984] Ch. 283 [R.] Facts. The Patels contracted with the Alis for the sale of their house. Mister Ali went bankrupt (defaulted on the house, so breach of contract), went to prison. Meanwhile, Mrs. Ali got pregnant twice, got bone cancer, was amputated, the whole nine yards. With only one leg, she can't really move out (and relies on her friend and community who are willing to pay damage). Issue. 1. Could Patel get SP as of law? 2. Is there an equitable defense that'll prevent that?Holding. 1. Yes. 2. Yes!Reasoning. Ratio. If proof of hardship is made, i.e. proof that is would cause more damage to the defendant to grant the SP than to the plaintiff not to get it, SP will not be granted (circumstances must be extraordinary and persuasive). Comments. This would have been unfairness if the house had been sold at a price much lower than its value; but the problem is about Mrs. Ali moving out – a court order would create hardship. This being said, the court said they'd order damages in lieu of SP only if she could show the court she would be able to pay (otherwise, it'd change securities law!).

Price v. Strange, [1978] Ch. 337 (CA)Facts. Price was overstaying his lease. Strange and he agreed that he could stay (new lease) should he make some repairs on Strange's house. In May, Price had done half the work before being stopped by Strange who repudiated the agreement (but she still accepted rent payments until September). Price asked for SP of the lease or damages. Issue. 1. Can he get SP? 2. Does Lord Cairn's Act apply?Judicial History. 1. No SP because there was no possibility of mutual enforcement. 2. No jurisdiction. Holding. 1. Yes. 2. No. Reasoning. LeGoff LJ. 1. You indeed can't get SP for personal service contract (the plaintiff's situation). Price's part of the agreement is a personal service contract. Strange's lawyer contended that since Strange wouldn't be able to ask for SP, as a matter of equitable mutuality, Price shouldn't be able either. The Court said the issue of mutuality is one of discretion and that here the lessee can get specific performance against the lessor even though the lessor could not get it from the lessee.Ratio. Attenuation of the mutuality principle. Comments.

G. DAMAGES1. Cost of Cure For Damage, Destruction, or Loss of Property

Liesbosh Dredger v. Edison S.S., [1933] A.C. 449 (HL (Eng.)Facts. The dredger Liesbosch was tied to the moor. The steamship Edison fouled its quay, carried her to the sea, where she sank.Issue. Should the damages also include the time lost for looking for a new ship to replace the sunken one?Holding. Yes. Reasoning. Wright LJ. The damages must be assessed as if the appellants had been able to go into the market and buy a dredger to replace the Liesbosch. It is true that at some point the rule was to “calculate the value of the property destroyed at the time of the loss, and to pay it to the owners, as a full indemnity to them for all that may have happened, without entering for a moment into any other consideration” (anything else being too hard to assess), it is no longer the case. “The value of the Liesbosch to the appellants, capitalized as at the date of the loss, must be assessed by taking into account: (1) the market price of a comparable dredger in substitution; (2) costs of adaptation, transport, insurance, etc., to Patras; (3) compensation for disturbance and loss in carrying out their contract over the period of delay between the loss of the Liesbosch and the time at which the substituted dredger could reasonably have been available for use in Patras, including in that loss such items as overhead charges, expenses of staff and equipment, and so forth thrown

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away, but neglecting any special loss due to the appellants' financial position. On the capitalized sum so assessed, interest will run from the date of the loss“Ratio. The indemnity for the replacement of lost property will include both the value of the lost property and a compensation for the disturbance. Comments. Boring case, it's just there to remind you the basic rules.

Harbutt’s Plasticine Ltd. v. Wayne Tank and Pump Co. [1970] 1 Q.B. 447 (CA)Facts. Wayne designed and installed a wax plant at Harbutt's factory. The contract included a clause saying that until takeover, Wayne would be fully responsible for all damage to Harbutt's property that was a result of negligence, up to the value of the contract (£2,330). The design was atrocious, but no tests were conducted and due to negligence on part of Wayne workers, Harbutt's factory burst to flames. Harbutt's insurers pays everything but about £3,000, so Harbutt was able to rebuilt its plant, however, it could no longer build a 5-storey ones and has to build a two-floor building.Judicial History. First instance judge said there had been a fundamental breach of contract which disentitled the defendants from relying on the clause and awarded £146,581 (difference in value of both plants) to Harbutt (whole amount, regardless of the fact that there was a new plant). Issue. Since they traded new for old, are they barred from getting the full damages?Holding. No.Reasoning. Denning LJ. “The destruction of a building is different from the destruction of a chattel. If a second-hand car is destroyed, the owner only gets its value; because he can go into the market and get another second-hand car to replace it. He cannot charge the other party with the cost of replacing it with a new car. But when this mill was destroyed, the plasticine company had no choice. They were bound to replace it as soon as they could, not only to keep their business going, but also to mitigate the loss of profit (for which they would be able to charge the defendants). They replaced it in the only possible way, without adding any extras. I think they should be allowed the cost of replacement. True it is that they got new for old; but I do not think the wrongdoer can diminish the claim on that account. If they had added extra accommodation or made extra improvements, they would have to give credit. But that is not this case. I think the judge was right on this point.”Ratio. One may replace destroyed old property with new one and be fully compensated only if he has no choice but to go to new property; (2) doesn't add extras; (3) does so to mitigate its losses.

Darbishire v. Warran, [1963] 1 W.L.R. 1067 (CA)Facts. Warran crashed into Darbishire's car. Fully admitted, Warran was ready to pay the cost of reparation until he saw the bill. He said that Darbishire had not mitigated his damages and that the damages were twice more than market value of the car at the time of the accident.Issue. Should Warran pay the full amount?Holding. No. Reasoning. Harman LJ. There was nothing sooooo special about this car that might make it reasonable for the plaintiff to have occurred repairs twice as expensive at the worth of the car. Ratio. You will not get cost of cure where is it unreasonable, you will get market value.Comments. SS thinks courts usually don't ask for mitigation where they order cost of replacement. This goes against his theory.

But it would also go against common sense (the “compensation” value is twice the replacement price!). The cost of repairing is akin to a specific relief because we are trying to eradicate the loss (substionary specific

relief). But if it's too big, it would be like hardship. Same in Ruxley.

General and Finance Facilities Ltd. v. Cooks Cars (Romford) Ltd., [1963] 1 W.L.R. 644 (CA)Facts. All-Stars Crane hired-purchased a crane from GFF. ASC had paid a little less than half, sold it to Gooch, who sold it to Romford Scrap and Salvage who instructed Cooks Cars to do some repairs on the crane (which created a construction lien). GFF, who has lost track of the crane during the previous transactions found it and asked for it or, that they wanted the balance of the hire-purchase contract. Issue. Can one ask, as remedy for the wrongful detention of goods, for return of the goods?Holding. Reasoning. Diplock LJ. GFF pleaded their title to the crane and relied on a demand for its delivery up. The prayer included an alternative claim for damages for conversion. Difference between detinue and conversion: “Demand for delivery up of the chattel was an essential requirement of an action in detinue and detinue lay only when at the time of the demand for delivery up of the chattel made by the person entitled to possession the defendant was either in actual possession of it or was estopped from denying that he was still in possession.”

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Ratio. Comments. Demand for delivery up of the chattel was an essential requirement of an action in detinue and detinue lay only when at the time of the demand for delivery up of the chattel made by the person entitled to possession the defendant was either in actual possession of it or was estopped from denying that he was still in possession.

2. Cost of Cure for Breach of ContractRuxley Electronics and Construction Ltd. v. Forsyth, [1995] H.L.J. No. 26

Facts. Forsyth hired Ruxley to build a swimming pool 7'6 deep. The pool was only 6'9. This doesn't change the value of the property, but rebuilding would cost £21,560Issue. Should Forsyth get the cost of rebuilding?Holding. No. Reasoning. He'll only get £2500 because he wanted a bigger pool (loss of pleasure108 + diminution of value, that's it). The loss isn't so terrible he'll have to rebuild the whole pool (indeed, he has no intention of doing so; and that's a good thing because it wouldn't be reasonable109). When the cost of cure is greater than the diminution in value resulting from breach, cost of cure will be awarded when (1) the ptf intends to use the damage award to get the work done; and (2) when it would be reasonable to do so. Non-pecuniary losses (e.g. loss of amenity) will be compensated if the purpose of the K is to provide pleasure/avoid pain.Ratio. Damages for breach of contract must reflect the loss (it's not about punishment). Comments. On the reasonableness, this is line with Woolertain and the likes: the value of replacement is really not in proportion

with costs. If the contractor had done it on purpose, he probably would have had to spit the money. But the homeowner was probably a bad faith punk.

Is the court refusing cost of cure just like it sometimes refusing SP + perhaps an underlying unclean hands. Note here that the defendant didn't get anything out of misperformance, so it's not a case of unjust enrichment.

3. Cost of Cure as Substitute Performance? Smith (S.), “SUBSTITUTIONARY DAMAGES” FROM C. Ricketts (ED.) JUSTIFYING REMEDIES IN PRIVATE LAW

The claimant in a private law action usually alleges a loss, either of the thing or of its value because of the defendant's fault. The first seems to be more asking for SP, the second for damages. However, on a closer inspection, «many damage awards appear to be set not at the value of the claimant’s loss, but at the cost of repairing, replacing, or obtaining a substitute for whatever was» lost.

Traditionally, cost of cure is seen as an equivalent to value of loss. It's seen as an indirect SP (with cost of cure, you can get what you would have gotten had the other party performed). Where SP is not possible, it's second-best. Problem: if performance can be attained, there will be no loss, so calling the award one for "compensation" is a misnomer. «If the award achieves its purpose the relevant loss will be eliminated (or prevented). […] This does not mean relief of this kind is inappropriate (the conclusion of this paper is exactly the opposite); the point is merely that such an order cannot plausibly be described as ‘compensatory’ [as the meaning of the term now stands]».

Some also see cost awards as proxy value awards. In this view, all damage awards are ultimately value of loss awards, this one assessing the value indirectly: what is the sum of money that would make the plaintiff indifferent to the loss? Of course, a subjective value element might kick in and make the assessment harder. Other problem: cases where the cost of cure is greater than the loss (Ruxley110).

Thirdly, some see cost of cure as consequential loss: the damages are just there to cover the loss (chattel not delivered, you still need it, you will have to buy another one, the price of the second one is a loss for you). Problem: plaintiff will not always want to rebuy the same thing, might use the money for something totally different. 108 Usually, such losses are not indemnifiable, unless of course, the contract is about being afforded a pleasure (loss of amenities doctrine). 109 But I guess cost of the cure could have been awarded if there was a clear and explicit reason, even a subjective one, for asking to a pool this deep. But here, it was really just about Forsyth's pleasure. 110 For example in Radford v De Froberville the claimant was awarded the not insubstantial cost of building a contracted-for wall between his property and an adjoining property even though the court determined that the value of the wall to the landlord was almost nil. In sale of goods cases the purchaser is routinely awarded cost of cure regardless of the value to him of the object. As Lord Moulton stated in Williams v Agius, ‘it is immaterial what the buyer is intending to do with the purchased goods. He is entitled to recover the expense of putting himself into the position of having those goods’.

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Because these arguments can be problematic, one can suggest to see costs of cure as substitutionary damages. «Cost of cure awards are a substitute for ordinary specific relief111 in cases where ordinary specific relief is not possible or desirable. They ensure that the claimant ends up in the same position she would have been in had it been possible to order ordinary specific relief, but they do this indirectly, by means of a substitute award.» This makes cost of cure award similar to punitive or nominal damages.

First, substitutionary damages give effect to an ordinary moral duty. If I destroy my neighbour's bicycle: I have to do something about it. Ordinarily, that means give him the money to rebuy the bike (or rebuy the same one), plus perhaps damages to compensate the fact that she had to buy a bus pass for the month. But the price of replacement has got to be the price of the replacement of the very broken thing (not that of a bike of lesser quality because I think that's all my neighbour needs). But it would be equally unacceptable for my neighbour to accept my money and then use it for something else. The payment of the purchase price (though not payment by way of compensation for other losses) is made on the understanding that it will be used to replace the bicycle.

«A duty to pay for a cost of cure is appropriate where four conditions are satisfied: (1) the defendant has breached his primary duty; (2) the breach cannot be cured by subsequent performance of the primary duty (because performance is impossible or the duty no longer exists); (3) the breach (or parts of it) can be cured by paying a third party to repair, replace or provide the relevant property or service; and (4) the claimant has or will pay for such a cure. This account is broadly consistent with the cases in which cost of cure is awarded by common law courts. In any case in tort or contract where cure is possible and where specific relief is impossible, not desired, or refused by the court, the court will normally make a cost of cure award.»

There are two exceptions. One is of intention requirement: «the rule that cost of cure will be awarded where a cure is possible is not applied in cases where the claimant has not paid for a cure and has no intention of doing so» -- this is pure substitutionary damages.

And two that cost of cure must be reasonable – Ruxley. «The concept of substitutionary damages does not itself explain the ‘reasonableness’ qualification» because we need to perform our duties. But, if we can deny ordinary specific relief when the cost of performance is grossly disproportionate to the value of performance, the rule should be the same for substitutionary damages. Note that no such rule can exist in the traditional view because if a loss has been proven, the claimant has a right to damages equal to the value of that loss, and no unreasonabless may be used.

Substitutionary damages and the availability of ordinary specific relief answer to the same rules (more or less, at least in theory). Specific relief is only available where damages are ‘inadequate’. «But if by ‘damages’ is meant ordinary value of loss (‘compensatory’) damages, this principle is deeply puzzling.» Three cases in which it doesn't fit: (1) payment of sum due under contract (courts never ask whether damages would be adequate in such cases); (2) ongoing breach of duty (such damages may be difficult to quantify, but the loss can sometimes be certain: courts sometimes say damages will be inadequate because the injury is significant/trivial, but compensation-wise, this makes no sense); (3) breach of contrat to sell unique good/land (inadequacy because lack of possible substitution, but there is obviously no possible replacement then; plus inconsistent with cases where SP cannot be conducted anymore and damages are nonetheless assessed).

Mitigation and dates of assessment. The mitigation principle is generally understood to provide that a defendant is not liable for losses that, while causally related to the breach, could have been avoided had the claimant acted reasonably. But with rare exceptions (Asamera), the mitigation principle is not applied when calculating cost of cure awards. By choosing to pay for substitute performance the claimant is increasing her losses. Yet we have seen that courts are willing to award the cost of cure where it is greater than the value of cure (Agnew, Tyler). Blablablaba.

4. CompensationH. Parsons (Livestock) Ltd. v. Uttley Ingham & Co. Ltd, [1978] Q.B. 791

Facts. Uttley sold Parson a hopper for storing pig food, but forgot to open the aeration. Mouldy food was fed to the pigs who got e. coli. Issue. Can Parsons get damages?Holding. Yes.

111 Ordinary specific relief ensures that the claimant is put in the actual position she would have been had the defendant performed his primary duty by ordering that the defendant do just that – perform her primary duty.

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Reasoning. Scarman. The contract did not mention responsibility for e. coli specifically, but any rotten food served could have make the pigs sick. And not aerating was a pretty sure step in the direction of getting the food to rot. Recovery should not be limited because the exact nature of the injury could not be anticipated (i.e. were not reasonably foreseeable), as long as there was a serious possibility of this type of injury resulting. Ratio. One will be liable for what is a natural consequence of their acts. It is not necessary to specify exactly the damages to occur, as long as what does happen is reasonably foreseeable (real danger, says Denning). Comments. Example of what we are not doing (about remoteness). SS would rather have the courts think about the purpose of the duty than to factor in all sorts of issues to make them fit in a theory he finds to normative.

5. Timing IssuesAsamera Oil Corp. Ltd. v. Sea Oil & General Corp. et al; Baud Corp., N.V. v. Brook, [1979] 1 SCR 633

Facts. Brook, the president of Amasera loaned stocks from Baud, a subsidiary of Sea Oil. The stocks were not returned (breach of contract), the price fluctuated (29¢ at the time of the breach, now 47$).Issue. How should damages be measured?Reasoning. The goods are far from unique here and their value is easy to ascertain (they're shares!), so damages will be adequate and SP will not be necessary. The common law rule is to the effect that the plaintiff is to be put back to the position he would be if the wrongdoer had not wrongdone: here recover the value of the loss opportunity of reselling the shares at profit. The determination of damages involves two principles: (1) the plaintiff has the right to recover the loss reasonably arising from the breach; (2) he has a duty to mitigate. If part of the loss is recoverable, courts will grant a period of time (can't recover while under injunction or where the defendant still has the shares, so it can't be at the time of the breach!) for such recovery and assess damages afterwards: if there has been no recovery (and thus no mitigation), though luck.In this case, lack of mitigation of part of Baud bars him from claiming SP. Ratio. Damages are measured by determining how much the purchaser would have to pay in the market at the time of breach minus the contract price. If part of the loss is recoverable, courts will grant a period of time for such recovery and assess damages afterwards: if there has been no recovery (and thus no mitigation), though luck. Comments. If the plaintiff cannot recover for what it actually avoided or should have avoided, what about the case where it is better off from payment of damages than it would have been from performance?I'm confused: compensation, substitute SP seems all blurry here. In substitute SP, remoteness is completely irrelevant, isn't? Mitigation is good for mitigating losses but it doesn't get sense about getting what you were denied (see earlier case). If it's compensation, it's 29¢, if it's what they lost, it's 45$, no?BAD SUMMARY.

Wroth v. Tyler, [1974] Ch. 30Facts. Mr. Tyler wanted to sell his house to Wroth, but Mrs. Tyler registered a protected interest (under matrimonial legislation) to stop the sale. Of course, this made Mr. Tyler breach his contract. K was for 6k, date of breach, 7,5k, trial, 11k. Mrs. Tyler is not a party to the contract. Wroth wanted SP, but this was denied to him. He then asked for compensation under Lord Cairn's Act. Issue. At what time should the value of the substitute SP (i.e. damages) be assessed?Holding. Trial date. Reasoning. SP is inappropriate (wife has interest, is not party to the contract, courts can't kick her out). But Lord Cairn's, blabla. The normal rule is that damages are assessed at the time of the breach (it's meant to compensate for the replacement bought as a result of the breach). But here, the plaintiff didn't have the money to replace at the time of the breach and he was asking for SP (which was a reasonable demand). About the rise, it was indeed abrupt, but it's the type of damages that has to be reasonably foreseeable, no the exact degree of the loss. Ratio. In order to truly be a substitute for SP, the damages must be assessed according to the value of the house at the trial date. Comments.

Johnson v. Agnew, [1980] A.C. 367 (HL (Eng.))Facts. Johnson wasn't able to repay his mortgage. So he made a contract with Agnew to sell the property at a price high enough to discharge the mortgage. Agnew breached, was ordered to SP, which he didn't do. Johnson defaulted on his mortgage and the bank foreclosed. Johnson is suing for damages. Issue. Can he get them?Holding. Yes.

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Reasoning. Lord Wilberforce. When the breach occurred, Johnson could have repudiated the contract and asked for damages or, and that's what he did, ask for SP. If SP is not granted, then he may repudiate the contract and demand damages. Even if the general rule says damages should be assessed at the time of breach, Johnson wasn't unreasonable in asking for SP (and hoping it'd be performed), so the date for damages will be the date at which the SP became impossible, i.e. at the time of the foreclosure. Ratio. Asking for SP doesn't prevent the plaintiff from asking for damages if the SP is not performed. Damages will be assessed at the time of the foreclosure, not at the time of the breach. Comments. Point of forcing sale if you're vendor is to oblige the purchaser to go through the registration process.

6. Equitable DamagesLord Cairns’ Act, (1858) 21 & 22 Vict. C. 272. In all cases in which the Court of Chancery has jurisdiction to entertain an Application for an Injunction against a Breach of any Covenant, Contract or Agreement, or against the Commission of Continuance of any wrongful Act, or for the specific Performance of any Covenant, Contract, or Agreement, it shall be lawful for the same Court, if it shall think fit, to award Damages to the Party injured, either in addition to or in substitution for such Injunction or specific Performance, and such Damages may be assessed in such manner as the Court shall direct.

7. Damages for Equitable WrongsCanson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534

Facts. Boughton was solicitor and agent to plaintiff (double fiduciary duty) but failed to disclose he was acting for other parties in a deal, including one whom he owed another fiduciary duty. Canson bought the house and suffered substantial losses due to engineering defaults (negligence was proven, not an issue here). He nonetheless sues the soliciting, alleging he would never have bought the house had he known of the other fiduciary duty.Issue. 1. Was there a breach of fiduciary? 2. Can the solicitor be held liable for the loss suffered by plaintiff due to the negligence of architects and engineers in subsequent construction on the land?Holding. 1. Yes (unanimous) 2. No (4:3:1).Reasoning. 1. There is a definite breach of duty, a breach of the equitable fiduciary duty. 2. Majority (LaF, Sop, Gonth, Cory). Unless there's a good public policy reason for it–as in the case of trust112; but not in this case–the rules of remoteness should be the same, whether the breach is equitable or not (towards fusion). This case fails to show a causal link between the solicitor's fault and the cause of the loss: the solicitor's liability does not extend as far as liability for losses due to the fault of a third party. Recognition of the breach of fiduciary duty is purely formal with regard to causation of loss. 2. Dissent (McL, Lamer, L'HD): it is true that the common law has rules of remoteness and mitigation, but this case is about the breach of an equitable duty, for which the standards are different. Standards should always be different (setting trusts apart is an artificial distinction). Canson's loss was caused by Boughton's breach (he wouldn't have bought), but doesn't include the losses caused by the engineers. Ratio. Majority: a court exercising equitable jurisdiction is not precluded from considering the principles of remoteness, causation, and intervening act where necessary to reach a just and fair result. where the common law (fusion argument). Dissent. Equity is different from common law and the causation rules should be different.

Hodgkinson v. Simms, [1994] 3 S.C.R. 377Facts. Hodgkinson hired accountant Simms to get independent professional advice on some real estate investment schemes (MURBs), which Simms heavily recommends. There's a drop in the market and Hodgkinson discovers that Simms had an interest in said MURBs. There is no question of fraud, simply a question of fiduciary duty, Hodgkinson pleading that he wouldn't have bought the MURBs had he known of Simms's conflict of interests. Simms also says the loss is remote and that because the point of the disclosure certainly wasn't to protect Hodgkinson against market drops, and there is evidence to the effect that Hodgkinson would have invested in MURBs anyway, be they Simms' or someone else's. Issue. 1. Was there breach of fiduciary? 2. Can Hodgkinson recover all his losses on all investments?Holding. 1. Yes (3+1:3). 2. Yes (3+1: 3). Reasoning. Majorité (LaF, L'HD, Gonth, Iaco113). 1. “A party becomes a fiduciary where it, acting pursuant to statute, agreement or unilateral undertaking, has an obligation to act for the benefit of another and that obligation carries with it a discretionary power.” Even in the commercial context. Hints: discretionary power, which can be unilateral, to which the other party is vulnerable. 2. Calculation of damages should be done on a restitutionary principle. Hodgkinson should 112 And this distinction doesn't bother him because there are also different categories in common law, e.g. losses arising out of deceit are stronger than losses arising out of misrepresentation.113 Actually, Iaco concurs, disgreeing with a side comment on Lac Minerals.

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be put in the situation he would be in without the breach (as good as). As Simms was unable to prove that the same loss would have been suffered regardless of the breach–the recession is an unfortunate background event, but it was a market risk linked to the investment, and it's the type of damage that must be foreseeable, not their amount. There are two policy reasons for this: (1) it would be unfair to place the risks of the market on a plaintiff who wouldn't have entered a contract but for the defendant's wrongdoing; (2) liability for fiduciary breach is often necessary to deter other potentiel wrongdoers. This is distinguished from Canson in the sense that there was no deceit from Boughton, and also Boughton had no link with the cause of the loss, but here yes. Since there is a public policy reason to apply the more relaxed rules of equity, Simms will be liable for the whole loss (money spent + consequential loss), regarless of the fact that part of the loss was due to the market crash (deterrence, deterrence). Dissent (Sop, McL, Major). 1. The only essential element of the breach of fiduciary duty is the depency, as there was no dependency, no confidence and no effective ceding of power, there was no breach of duty, only a breach of contract. 2. As such, indemnity and causality should be assessed on the normal rules of the law of obligations: Hodgkinson should be put back in the situation where he would have been had Simms respected his contract (i.e. the difference between the real value and the value Hodgkinson paid, if such difference exists), all this being mitigated by the reasonable foreseeability principle: the market crash is independent of the defendant and the but-for test fails. McL obiters that the but-for test, in her eyes, wouldn't have been met on relaxed equity principles. Ratio. Majority. A court exercising equitable jurisdiction is not precluded from considering the principles of remoteness, causation, and intervening act where necessary to reach a just and fair result, and here such public policy consideration exists. Dissent. This is not a case for equity, and even if it were, the equitable causation rules should be different from the ones of the common law, but not that different.Comment. Careful, LaForest speaks of “restitutionary damages” because it's about getting you money back. Careful, this is not the same as restitution.

Cadbury Schweppes Inc. v. FBI Foods Ltd., [1999] 1 S.C.R. 142 [R.] Facts. Duffy-Mott licensed its trademark Clamato and the (confidential) formula to Caesar Canning. Caesar Canning contracted with FBI foods and gave it the confidential formula as well so they would be able to work. Cabdury bought Duffy-Mott, terminated the agreement with Caesar Canning and had a non-concurrence clause about Clamato juice. Nothing about FBI foods. Caesar Canning used the formula to work recreate a similar product (minus the clam). Cadbury knew about this but didn't do anything (thought the absence of clam would prevent the infringement). Caesar Canning went bankrupt and FBI bought its assets. Cadbury reassessed the situation and decided to sue. Issue. 1. Can a permanent injunction be granted? 2. Should there be punitive damages?Holding. 1. No. 2. No.Reasoning. 1. SP was denied b/c (1) it took the ptf an unreasonably long period of time to assert their claim; (2) the information being used was “not very special,” which the court held demonstrated prejudice against the dft; and (3) damages were adequate. 2. Binnie noted that this was not a case of breach of fiduciary duty. He accepted that equitable rules could in some cases provide higher compensation than in tort, but held that in this case there was no reason that compensation should exceed the normal level of tort recovery, namely what the plaintiff would have earned ‘but for’ the defendant’s wrong. Ratio. Latches (delays) might bar you from claiming.Comments.

8. Punitive DamagesWhiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595 (from Ont).

Facts. The Whiten family's house burnt down in January 1994. It was minus 18 degrees outside. The husband gave his slippers to his daughter so she could get help and he suffered serious frostbite to his feet. The fire destroyed everything, including three cats. They rented a nearby cottage for $650/month. The insurers made a single $5000 payment for all living expenses, paid the rent for a few months and then stopped, without telling the family, who was in very poor financial state, and became confrontational, saying the Whitens had torched down their own house.

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Judicial History. The trial judge said there wasn't even an air of reality to the arson. The jury awarded 114 compensatory damages and punitive damages of one million dollars. The CA brought it down to ten thousand. Issue. Should the punitive damage award be restored? What is the reasonable spectre of punitive damages in civil actions?Holding. Yes (6:1)Reasoning. Binnie J. (majority). Pilot acted in an evil manner (trumped evidence, tried to make the Whitens settle for less than they needed). The jury added punitive damages of one million, that in the end, "added something less than treble damages to her actual out-of-pocket loss" (the insurance company qualifies it as an "undeserved windfall"). It is high, but it is rational in these specific circumstances: "certainly at the upper end of a sustainable award on these facts but not beyond it".

It is agreed that punitive damages are touchy because if it's ok for tort law to serve a punitive purpose, you wouldn't want to "Americanize" our process (paras. 38-39). Extensive review of what is going on in other countries. In Canada, it's ok to award punitive damages for breach of contract, "[only if] the conduct constituting the breach is also a tort for which punitive damages are recoverable." Discusses the principles.

Lebel J. (dissenting). Agrees with Binnie's comparative analysis but not with his conclusion: Pilot was of bad faith but one million is way beyond reasonable use of this remedy. Agrees with Finlay JA of the Ont CA. "The purpose of this part of our legal system remains to make good the loss suffered, no less, no more [para 147]". "Courts should take care that they do not alter the nature of tort law by turning the focus of civil litigation away from compensation of a claim to punishment of defendants.[para. 168]"Ratio. Punitive damages are ok in Canada, as long as they are reasonable, with regard to the circumstances and the injury.

Smith (STEPHEN), CONTRACT THEORY (2004) ON ‘PUNITIVE DAMAGES’Even when the breach was deliberate, there usually isn't any sort of punitive damages. Civil law is about

compensation, wrongdoing is more a question of criminal law. This is also explainable on an efficiency approach. «But from the traditional rights-based view of contract law, the refusal to punish deliberate breach is a genuine puzzle.» «In the end, the most plausible explanation of the rule from a rights-based perspective is the traditional one that breach of contract is simply not serious enough to attract punishment.» Wrongdoing must be spectacular to get a punitive sanction. The breach must be very serious to warrant punishment and not just compensation.

9. Nominal Damages

114 Instruction to juries. 94     To this end, not only should the pleadings of punitive damages be more rigorous in the future than in the past (see para. 87 above), but it would be helpful if the trial judge’s charge to the jury included words to convey an understanding of the following points, even at the risk of some repetition for emphasis. (1) Punitive damages are very much the exception rather than the rule, (2) imposed only if there has been high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour. (3) Where they are awarded, punitive damages should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of the misconduct, the relative vulnerability of the plaintiff and any advantage or profit gained by the defendant, (4) having regard to any other fines or penalties suffered by the defendant for the misconduct in question. (5) Punitive damages are generally given only where the misconduct would otherwise be unpunished or where other penalties are or are likely to be inadequate to achieve the objectives of retribution, deterrence and denunciation. (6) Their purpose is not to compensate the plaintiff, but (7) to give a defendant his or her just desert (retribution), to deter the defendant and others from similar misconduct in the future (deterrence), and to mark the community’s collective condemnation (denunciation) of what has happened. (8) Punitive damages are awarded only where compensatory damages, which to some extent are punitive, are insufficient to accomplish these objectives, and (9) they are given in an amount that is no greater than necessary to rationally accomplish their purpose. (10) While normally the state would be the recipient of any fine or penalty for misconduct, the plaintiff will keep punitive damages as a “windfall” in addition to compensatory damages. (11) Judges and juries in our system have usually found that moderate awards of punitive damages, which inevitably carry a stigma in the broader community, are generally sufficient.97     If counsel can agree on a “bracket” or “range” of an appropriate award, the trial judge should convey these figures to the jury, but at the present time specific figures should not be mentioned in the absence of such agreement (Hill, supra, per Cory J., at paras. 162-63). (This prohibition may have to be reexamined in future, based on further experience.) Counsel should also consider the desirability of asking the trial judge to advise the jury of awards of punitive damages made in comparable circumstances that have been sustained on appeal.

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C & P Haulage v. Middleton [1983] 1 WLR 1461 Facts. CPH permitted Middleton to use their premises for his car repair business, contract to be reviewed every six months. Middleton did a lot of repairs before being summarily ejected. He continued his business from his own garage, but sued CPH for loss (and damages for all the repairs he has done in the leased space). Issue. Can he get them?Holding. Nominal damages.Reasoning. Ackner and Fox LJ.. The trial judge found no loss since he has been able to carry his activities from his own garage, despite the fact that CPH should have given him a notice that would have enabled him to stay one moth longer. Ratio. Breach but no loss will give rise to nominal damages only. Comments.

H. RESTITUTION (AS A RESPONSE TO AN UNJUST ENRICHMENT)1. Personal

Royal Bank v. The King, [1931] 2 D.L.R. 685 Facts. The RBC mistakenly paid the government of Manitoba $1,871 and wants it back. Issue. Can it get it back?Holding. Yes. Reasoning. Money paid under a mistake of fact, as the bank contends, can be recovered, on four conditions: (1) The mistake must be honest: knowledge will not be imputed to the plaintiff regardless of whether he could have known, as long as his ignorance doesn't amount to negligence; (2) the defendant must have some sort of link with the mistaken payment (either as inducing it, or as responsible for it, or connected with it); (3) if the facts in which the plaintiff believed had been true, there would have been a legal obligation to pay; (4) the receiver of the money has no legal or equitable or moral right to retain the money as against the payer (this is the exact converse of (3)). Here, all conditions are satisfied. Ratio. The receiver of a payment made under an honest mistake of fact, linked with the receiver and that was, to the payer's mind, a legal obligation cannot be retained by the receiver.

2. ProprietarySmith (STEPHEN), PRIMER ON TRUSTS

In broad terms, a trust exists where one person under an obligation to manage property for the benefit of another. Trusts are usually created by a settler who, with the intention of creating a segregated trust fund, transfers assets (value) to a trustee (the duties of which are in the trust deed). In performing all these duties, the trustee is a fiduciary –meaning someone who is under a duty to act in the best interest of another– in this case the beneficiary of the trust: the trustee must not benefit from his position, has a duty to account and provide information and must keep his assets separate from the trust's.

The rights of the beneficiary are both personal and proprietary. The personal rights of a beneficiary under a trust are the ‘right to compensation’ (trustee must compensate the beneficiary for anything the beneficiary did not receive that the beneficiary would have received had it acted properly) and the ‘right to account against the trustee’ (right to sue the trustee for any benefits or profits the trustee makes through breaching the trust obligations).

The proprietary rights are more important in the business trust context. (1) The trustees’ creditors cannot get at the trust property. (2) The trustee’s ‘obligation to account’ is accompanied by proprietary protection in favour of the beneficiary (who has priority over the trustee's creditors). (3) The beneficiaries can follow the trust property into the hands of anyone who is not bona fide (in good faith) or has not given value (paid for the property).

This probably also applies to non consensual trusts (non express, trusts arising by operation of law), though it's less clear because such trusts are often discovered by the courts are the moment of breach.

Chase Manhattan Bank v. Israel-British Bank (London) Ltd.Facts. CMB pays IBB twice. IBB goes bankrupt. CMB wants to get this second payment. There is no question that this is an UE case, but they don't want a personal remedy because they'd be less well off than creditors. Issue. Can they get a proprietary order?Holding. Yes, CT!Reasoning. Goulding. Ratio. Money paid by mistake ford not enter in the general wage of creditors. Comments. No clear that this is good law anymore in England; and not enough cases in Canada to judge. The latest UK cases seem to suggest that a proprietary UE remedy will rarely be granted, though it hasn't formerly been overruled.

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Peter v. Beblow, [1993] 1 S.C.R. 980Facts. Peter and Beblow were a common law couple for twelve years. Even though they were not married, the wife acted as such and also as the stepmother for the kid, since only the man was working outside the house. After they split up, since most assets were in his name and bought prior to their meeting (so she has no direct claim under contractual law or property law), the woman claims he was unjustly enriched by her housework.Issue. Is this a case of CT?Holding. Yes.Reasoning. To have a CT, you need UE. For UE you need: (1) enrichment of one party; (2) corresponding deprivation to the other; and (3) no juristic reason for it. Maintenance and preservation of pre-existing property is a transfer of wealth (so long as there is an actual proprietary link), and will be considered UE if they are substantial (higher than average employment). Lack of juristic reason here is lack of obligation on part of woman to do this. This being said, the CT will be granted only if it's not better to give money. Here, given the (1) claim of the plaintiff in relation to the property and (2) the fact that he claim can't be satisfied with just money and (3) that there is no hardship.Ratio. 1. CT can be imposed as a remedy for UE when there is a link between the property and the UE and that monetary awards wouldn't be adequate. 2. To have a CT, you need UE. For UE you need: (1) enrichment of one party; (2) corresponding deprivation to the other; and (3) no juristic reason for it.Comments. A lot of commentators think this is a bad case: (1) it's not really about UE, it's rather about legislating family law for common-law couples (she had no contractual claim because there was no agreement, she wasn't married so she wasn't protected by family law statutes and she was not the joint owner) – courts should have granted an injunction or a vesting order; (2) the ratio is clear, but the case doesn't fit the ratio: (a) the cause of her right (housework) does not correspond to the object of the remedy (the trust is on the house);(b) why was a monetary award not adequate (unless there are creditors or a special attachment we haven't heard of)?

Ellingsen (Trustee of) v. Hallmark Ford Sales Ltd. (2000), 190 D.L.R. (4th) 47Facts. HFS sold a truck to Ellingsen. Since the sale was condition to his paying the full amount, Ellingsen left with the truck and without paying (he'd later be covered by the bank, though HFS). Title was also transferred (for insurance). Three months later, Ellingsen went bankrupt. The trustee in bankruptcy and HFS both claim the truck.Issue. Is this a case of UE for which HFS could ask for a CT?Holding. Yes.Reasoning. In the absence of payment, the sale never really occurred (condition precedent). The lending of the truck was not "financing" (which would have put HFS in the same position as the other creditors). As a policy matter, CT shouldn't be imposed just so a creditor can have a better claim: since there was no sale, the truck was not part of Ellingsen's "patrimony" and has such couldn't have been hope for by the other creditors, so it wouldn't be unfair to impose a CT. HFS says this is a sale, a conditional sale, a sale conditional to the payment of the money. If it's an ordinary sale, HFS is an ordinary creditor. [Here, prof. explains secured transaction stuff, the point of which was: if you want priority, you need registration]. Couldn't argue lending because somehow title had passed. Ratio. In cases of bankruptcy, a CT may be imposed where it would not unfairly deprive creditors to assets to which they had reasonable entitlement.Comments. Why was there a transfer of title in the first place? It's hard to believe that a car dealership would not put a condition. BAD SUMMARY.

I. GAIN-BASED AWARDS1. Tort

Ministry of Defence v. Ashman, 66 P & CR 195, [1993] 2 EGLR 102, [1993] 40 EG 144, 25 HLR 513Facts. Mister Ashman was a flight sergeant in the RAF and he left Mrs. Ashman. But Mrs. Ashman stayed in their RAF-subsidized house. RAF wants damages for this wrong. Clear trespass case. Issue. How should damages be calculated? Should they be calculated by reference to the market rent, by reference to the subsidised rent paid by the serviceman so long as he and his family remained in lawful occupation or in some other way?Holding. Reasoning. In overstaying, Mrs. Ashman was a trespasser (wrongdoer). Even if there's no loss, the RAF must be paid damages, even if they are nominal. Kennedy LJ. The problem with the market method is that these house are not opened to the public. And Mrs Ashman only stayed because she couldn't go elsewhere, so it would be better to to calculate the value out of what she would have had to pay for suitable local authority accommodation, had any been available.

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Hoffman LJ. The trespass created a loss, either on the trespass itself or on the fact that by staying and not paying, Ashman was UEed. It is true that in the earlier cases it has not been expressly stated that a claim for mesne profit for trespass can be a claim for restitution but why not do it now. The open market value will ordinarily be appropriate because the defendant has chosen to stay in the premises rather than pay for equivalent premises somewhere else. Ratio. The plaintiff gets the value that the defendant obtained from the trespass and ordinarily, that's the market rental rate; in this case it's the price she would have paid if she had staying in council-subsidized housing. Comments. It is clear that the RAF could have sued for loss of profit (like in the Inverugie case), but they probably didn't

because there was no loss (no waiting list, no one else to rent it out to). In Ashman, the defendant was a trespass (clear wrong), but the RAF didn't suffer a loss because they wouldn't have

been able to rent the house (she was squatting, pretty much). The trespass gain if what she didn't pay, what she would have paid to get a license to stay.

The problem is that Ashman was only staying because she was too poor to go elsewhere and she wouldn't have stayed in a house the price of a RAF house, rather in some city-subsidised dwelling – isn't her profit rather what she saved by not going in these dwellings? That would better correspond with the idea of gain-based award: it's hardly compensation for RAF's loss. But if we're going after her profits, it's almost like an account of profit (akin to equitable duties). Lord Hoffman seems to be using the language of restitutionary damages, suggesting this is unjust enrichment, but it can't be the case since the loss and profit don't correspond.

Question: if there are no losses, why don't you stick to nominal damages? After all, if you go for gain and that there is none, the plaintiff shouldn't get anything.

Inverugie Investments Ltd. v. Hackett [1995] 3 All E.R. 841 (PC) Facts. Hackett had a leasehold property. Inverugie was the owner. Ejected Hackett, but twist his, he didn't have the right to eject him. Fifteen years later, Hackett goes back. Meanwhile, the hotel was running at a loss. Can't claim for loss (there were no profits), claims for disgorgement of gains. Hackett trespassed for 15 years in a hotel that was losing money. Issue. How should damagesbe calculated?Holding. Reasoning. Lloyd of Berwick. A person who lets out goods on hire (or the landlord of residential property) can recover damages from a trespasser who has wrongfully used his property, just because he's a trespasser. Some authors says these "strict liability cases" are exceptions to the general rule that damages are granted as compensation for a loss, but judges here seem to think it depends how you define loss: “it is no answer for a wrongdoer who has deprived the plaintiff of his chair to point out that he does not usually sit in it or that he has plenty of other chairs in the room.” [SS says this is evil: it's like saying the award is a bit of compensation and a bit of restitution] As for the cost, it is the costs of the availability that must be paid, not the costs of the actual use/benefit (“If a man hires a concrete mixer, he must pay the daily hire, even though he may not in the event have been able to use the mixer because of rain”). En l'espèce, market rent.Ratio. It's the user-principle: the owner is entitled to a reasonable rent. Comments. The trespasser made no profit (was running at a loss), so couldn't ask for profits. There's a big windfall for the plaintiff: it's unlikely we would have rented every apartment for 15 years even if he had run the hotel chain himself. That's unrealistic.

United Australia v. Barclays Bank, [1941] A.C. 1 (HL (Eng.)) Facts. A debtor of UA sent it a cheque for 1900£ to the bank, but a bank employee fraudulently endorsed it to MFG, another company [himself, Inc.], which deposited the cheque in its account at Barclays. MFG went bankrupt, so UA is now suing Barclays, claiming the cheque was converted negligently. Options. UA could sue the bank for conversion or MFG for what we would now call a gain-based wrong (misdirecting of the cheque). **Issue. Did UA waive the conversion by MFG (i.e. give up the possibility to claim in tort) by suing MFG for money lent or had and received (i.e. restitution)? If so, does that waiver also waive the conversion by Barclays?Holding. No.Reasoning. Many years ago, a fiction was created whereby if a tort was committed and the victim sued for another award (e.g. restitution, as in this case), then the victim was effectively condoning the tort (or “waiving the tort”) and could no longer make a claim for the tort; however, it’s time for that fiction to end. If the plaintiff truly treats the wrongdoer as having acted as his agent, overlooks the wrong, and by consent of both parties is content to receive the proceeds, then this will be a true waiver. This is retroactive ratification of a relationship. However, in most cases for conversion, blackmail, fraud, etc., the plaintiff has no intention of waiving or excusing the tort. The plaintiff is actually

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protesting violently against what has been done to them. A person cannot waive a wrong unless it either has a real intention to waive it, or such an intention can be imputed. That is not the case here. “Doctrine of Merger”: Having established that this is a question of alternative remedies (not a waiver of inconsistent rights), the plaintiff may pursue both remedies together, until the time of judgment, when the cause of action on both will be merged into one.Ratio. Again, a single wrong can have multiple responses to it. Chosing one remedy doesn't mean the others cease to exists: the cause of action is the same wrong, you just have to chose. Comments. Legislation changes this because the bank was obviously innocent in this.

2. Breach of Fiduciary DutyBoardman v. Phipps, [1967] 2 A.C. 46

Facts. Boardman was Phipps's trustee and also owner of a company (which Phipps didn't know). He bought shares from the company, realizing a big profit for the trust (and also partly for himself but he was really doing it because he knew his company would perform very well). Issue. Does this amount to a breach of trust?Holding. Yes. Reasoning. Hodson. Even if he made profits, no person standing in a fiduciary position, when asked for account of profits, is protected from the breach. Guest. Boardman was acting in a fiduciary capacity to the trustees and he was trying his best but a person in a fiduciary capacity is not allowed to benefit from any transactions into which he has entered with trust property and he did. “If Boardman was acting on behalf of the trust, then all the information he obtained […] became trust property”.Ratio. Trustees can never profit from the trust. Beneficiaries can chose to sue for breach of trust or disgorgement of profits but not both. Comments. Does this say information is property?LiS's view: Since the meaning of the trustee's duty of loyalty is that the fiduciary cannot profit from the relationship, gains can be regarded as the material embodiment of the breach of duty –what the fiduciary has, as it were, sold out the duty for– and the beneficiary is as entitled to these profits as he or she was to the duty for which they were exchanged.

STEVENS (Robert), “Rights and Torts” [not in casebook]Contrary to what is often believed, the courts are not primarily or exclusively interested in compensating

for loss, but there are rather concerned with is valuing a right that has been infringed115: the proof of this is that [despite what is said of nominal damages?], there are many cases about people who have been compensated even if they couldn't show a loss.

After an exhaustive review of case law, Stevens draws a distinction between damages awards set at (1) the value of the right itself, i.e. the plaintiff will get a sum of money that represents the value of the right infringed, this could be the cost of purchasing an alternative (substitute SP)116; or (2) value dealing with consequential loss.

Now, onto gain-based awards, RS's argument goes like this: if you infringe my right (copyright, trespass), we have to value my loss, which will be done at market-value, “objectively” 117 . RS accepts that where there is no loss, you can concentrate on stripping the wrongdoer of his profits at market-value118. RS thinks Inverugie is right and Ashman is wrong.

WEINRIB (Ernest J.), “Restitutionary Damages as Corrective Justice”[This is a groundbreaker theory in the sense that Weinrib links a bunch of cases nobody had made sense

of]. Since property gives proprietor an exclusive right to the thing (and correlative duty on others to respect that right), misappropriation of that thing (or of its natural accessories, say) by another will most often give rise to restitutionary damages (and as such, they are an entitlement). “Restitutionary damages reverse the wrong by showing, through the return of the benefits, that the law considers the defendant's implicit assertion

115 SS: really the opposite of civil law. But RS is a pure common-law dude. I mean, he doesn't like Donoghue c. Stenvenson because he feels the common law was trying to be like the civil law and that all of the 20 th century tort law has gone downhill from there. 116 Stevens calls it substitute remedy in a more metaphysical way. SS thinks you should actually go buy; Stevens thinks you value the right (at market value though not explains).117 This wouldn't take into account the subjective value of a piece of property to the plaintiff. 118 But what if he lost money?

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of ownership to be a nullity whose consequences are to be undone […] Thus, restitutionary damages are available for intentional torts against property and not for harm to property that results from negligence”. Property leads to a more satisfying answer than corrective justice because it explains the plaintiff's “windfall”.

This means Ashman is correct and Inverugie is wrong. Near the end, Weinrib take the example of a thug gets paid to beat you up [Blakes is a case like that in

the sense that you are paid to do something you know is wrong]. Weinrib says that your bodily integrity usually isn't considered a property right: if you get money running me over during a drive race, you can't get money I won; but if I injure you intentionally to get a sum of money, I am treating your body like a piece of property (I am “commodifying it”. So we take the money like we would if he had beaten my horse.

Gains from dealings in property are as much within the entitlement of the proprietor as the property itself. […] The remedy is conditioned, therefore, not merely on the defendant's realization of a benefit but on the defendant's having treated the object as if it were his or her own. […] Thus, restitutionary damages are available for intentional torts against property and not for harm to property that results from negligence. [consistent with traditional conversion]

3. Breach of ContractWrotham Park Estate v. Parkside Homes [1974] 1 W.L.R. 798 (Ch.)

Facts. Parkside build fourteen houses in breach of a restrictive covenant. Courts held it would be wasteful to destroy them. The value of Wrotham Park didn't even change (no harm). Issue. Can Wrotham recover?Holding. Yes. Reasoning. Even if the traditional rule is that the plaintiff should be put back in the original state (if he had not suffered a loss). However, something has to be done because the defendant profited from the breach even if the plaintiff suffered no loss. So we'll work around the rule: how could there not have been a breach? Well, either if the houses hadn't been built (but ordering the destruction seems a little drastic) or if there has been no covenant. Ratio. When the breach of a “duty” gives the breachor an advantage and doesn't disadvantage the breachee, the compensation will be that of the reasonable price of having been in a situation where no breach could have occurred. Comments. Assessment follows economic theory. Note that the courts are quite objective in the evaluation of the value (don't look at bargaining skills of parties, or

attachments). It's proprietary away (link with way-leave cases). Quasi-proprietary rights. -- Injunctions are usually granted for

negative covenants; but land warrants specific relief. Working backward from remedy? And then saying you have a property right? Strange.

The plaintiff asked for the covenant (didn't pay). This made the going price lower (because you can't build as much): the argument could be made that by agreeing to this covenant, I have effectively given you something, a lower contract price (some cases accept negative benefits). So you've saved money. No, if you go and break the covenant, it's like broken delivery: I gave you a savings on condition that you keep the covenant. So it's just UE and you're just trying to get back what you agreed to get from this covenant, i.e. a reduction of the price.

The damages were characterised as damages for loss of opportunity to bargain, as being a reasonable price which the plaintiff could have obtained for releasing the defendant from the covenant; but it was accepted by the Court that on the facts the plaintiff would not have granted any such release. It was held that the appropriate award of damages would be “such a sum of money as might reasonably have been demanded by the plaintiffs from Parkside as a quid pro quo for relaxing the covenant.” The award is clearly open to a restitutionary interpretation, although whether its basis is in restitution or compensation is not made clear by the Court.

City of New Orleans Firefighters [not in CB]Facts. The City of New Orleans has a three-year contract for 50 firemen and 20 horses with a private contractor. At the expiry of the contract, they discovered there had never been more than 25 firemen and 10 horses. Issue. Is the contractor liable?Holding. No.Comments. Should it have been decided on a gain-based perspective, like Blakes? SS thinks this should be seen as UE: you have paid for 50 firepeople, you only got 25; even if nothing “wrong”

happens, the other has been enriched and you've been impoverished and there's no reason for that.

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But have you really been impoverished? On his Wrotham view of UE, yes because there was a negative benefit. But Wrotham is weird. SS: “I haven't convinced the world on it”.

Another problem is that you can't get partial restitution, you have to completely fail to perform to get restitution. This technical rule exists simply because it is hard to assess the different components of the price of a contract (maybe whole contract was worth 250$, but each firemen was only worth 4, the remaining 50$ being for the firehouse; so you can't say, the plaintiff gets half the price because the defendant only had half the firefighters; but maybe the firehouse would have been smaller and not worth 50$ if there had been less firefighters, but would it really have been half, etc.). Pro-rate is artificial.

SS thinks this should have

Renault Dealership [not in CB]Facts. Renault had a plan where members of a certain union would get a discount on certain Renault cars. A Renault dealer pretended he has 250 orders from union members, so he got the rebate but sold them (also at discount but he still made a neat profit). Somebody found out. The dealer said the importer couldn't prove a loss because he would never would have sold them at a regular price (proof of that was made). Issue. Can Renault get the dealer's profits?Holding. No.Reasoning. There was no fiduciary obligations, no way this could be construed as way leave and no loss. So the plaintiff gets nothing. Comments. A similar case went the other way in Canada. SS: isn't it morally wrong that a wrongdoer be allowed his profits? This would be a great case for Weirib's property-based theory.

Attorney General v. Blake, [2001] 1 A.C. 268Facts. George Blake was a spy for Russia and, in 1961, was sentenced 42 years of imprisonment. He escaped in 1966 and fled to Russia. There, in 1989, he wrote his autobiography, where he related his activities as a secret intelligence officer. The information wasn't confidential anymore, so the government couldn't prove it had incurred a loss because of the book being published. However, it had to find something to strip Blake of his indecent profits (the “financial fruits from his treachery”). Issue. 1. Is there a fiduciary duty? 2. Is there a breach of contract? 3. Is there a remedy?Holding. 1. No. 2. Yes. 3. Yes: account for profits…Reasoning. Court of Appeal. The CA had reached the same result (strip him of all profits) and suggested (though it was knocked down by the HoL) that there are two kinds of contracts: skimped performance [e.g. firefighter case or Tito v. Waddell] and cases where the “defendant does the very thing he was not supposed to do under the contract” [e.g. Wrotham or Blake]. Only in the latter case should the defendant be stripped of all profits. The HoL knocked this interpretation down, finding it too rough for restrictive covenants (like non-competition covenants) [even in the civil law, which is not very strong on efficient breach, nobody has ever suggested this – this goes along the lines of there being traditionally no punitive damages in contract actions]. House of Lords. 1. The AG admitted it was more a public law problem119. 2. There was a breach of a non-disclosure agreement. When breached, such damages entail restitutionary damages. But such damages follow the restitutio in integrum principle, i.e. are assessed in relation to the plaintiff's loss. But, “I prefer to avoid the unhappy expression ‘restitutionary damages’. Remedies are the law’s response to a wrong (or, more precisely, to a cause of action). When, exceptionally, a just response to a breach of contract so requires, the court should be able to grant the discretionary remedy of requiring a defendant to account to the plaintiff for the benefits he has received from his breach of contract.” Dissent. 1. Blake escaped his “just punishment” and left no assets in the UK in 1965. But the profits made by his book could be construed as assets. However, this is a criminal law claim, not a private law on. And Lord Hobbenhouse doesn't like Lord Nicholl's judgement because he doesn't explain why the gains suddenly replace the loss (if it's about morality, it's about criminal law). Without that explanation, it is too dangerous to have non compensatory damages for breach of contract.Ratio. This illustrates the tension between two principles: wrongdoer should not profit from his/her wrongdoing vs. remedies (in private matters) compensate only for loss. Extension of the duty of loyalty to contract situations. Comments.

119 And don't ask me what prevented a public law action.

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Blake asks for further money from the publisher so he could pay for his defence, as he was refused legal aid. But the Court appointed an amicus curiae at trial and appeal at HofL was pro bono.

Same situation in Snepp v. United States (1980) 444 U.S. 507, where the court considered a remedy which required Snepp ‘to disgorge the benefits of his faithlessness’.

This is a borderline case. Canadian courts would probably have found a fiduciary obligation. The Crown could have put an injunction (or some sort of negative covenant) on No Other Choice (the book) but

didn't. It didn't take action against Jonathan Cape either. Blake characterizes the remedy as an accounting of profits (equity 101!).

4. Gain-Based Proprietary AwardsHong Kong (A.G.) v. Reid, [1994] 1 A.C. 324

Facts. Reid was a corrupt public prosecutor. He used the bribe money he received to obstruct certain cases to buy three properties. Issue. Should a proprietary remedy be granted? In the form of a CT?Holding. Twice yes. Reasoning. Templeman. A fiduciary may never benefit in breach of his duty (actually, a fiduciary may never benefit punto). The question is: who should benefit then? The person he profited from, here the Crown. The remedy granted is that of constructive trust, a proprietary remedy (excluded from third-parties and other creditors). Plus Reid is just lucky the value went up because had it gone down, he would have been obliged to pay the difference from his own pocket!Ratio. Money gained in breach of fiduciary obligations (and profits derived from it) will be deemed held on constructive trust for the person the fiduciary profited from (but the point is really that the fiduciary shouldn't profit from it). Comments. The king can do no wrong only the crown can "undirty" the bribe money?

Soulos v. Korkontzilas, [1997] 2 S.C.R. 217Facts. Soulos hired Korkontzilas has is real estate agent to purchase a house, his banker's actually, which is “a source of prestige in [the Greek] community”. But Korkontzilas, in breach of his fiduciary duty, has his wife buy the house. What Soulos wants is the house (not just financial value, prestige, esp. given the market value dropped). Issue. There is no UE. Can Soulos still get CT on that specific property? Put otherwise, can a constructive trust over property be imposed in the absence of unjust enrichment?Holding. Yes.Reasoning. Majority (McL). Korkontzilas definitely broke his duty of loyalty. It is true that there is no “unjust enrichement” in the sense that while the defendant has been enriched, Soulos didn't suffer any financial loss. However, breaches of equitable duties must entail punishment , as to preserver the integrity of relationship: this is a case that “engages the conscience” of the court. There can be equitable remedies for cases where no loss has been suffered, courts will impose a CT if (1) equitable obligation of the defendant (2) assets resulting from breach of equitable obligations (through deemed or actual contractual agency) (3) plaintiff must show legitimate reason for seeking a proprietary remedy (4) no injustice in imposing a constructive trust (e.g. protection of the interest of an intervening creditor. so court orders CT (esp. since no one but K would suffer from a transfer of property). Dissent (Sopinka). First, since equitable remedies are discretionary, McL shouldn't have changed the CA's decision not to impose CT (appellate deference). Other problem is that, equity or not, there is no remedy where no loss has been suffered (bad conscience is not enough). Ratio. Constructive trust and good conscience are the foundation of equity. From Sop. There is no remedy were no loss has been suffered. Comments. Institutional constructive trusts v. remedial constructive trusts (which by some is not considered a trust but a

remedy). This is classic McL equity: it's a principle remedy, there are no rules; just happens when the court's conscience is

affected. Very broad test and many people worry about it, especially for insolvency cases (though, for once, it's not the case here). And not very predictable if equity entails you to do anything.

Some people think it's disguised SP, but it's not too great for the facts. Not a Gain-Based Award: In this case, unlike the previous cases in this section, what was granted by the court was not really a gain-based award: the ptf wanted the property even though it went down in value, and he actually had to pay for it (probably at the lower market price). All he received was the opportunity to buy it, rather than profits made by the dft. It’s kind of like SP for a fiduciary duty (had the duty been performed, the ptf would have bought the property). But that would mean the duty arises are the moment of the breach – which is also consistent with a finding of CT.

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Some suggests that the step (4) isn't necessary in the sense that if (1) to (3) are there, there will be a CT, but that if (4) is there too, they just won't enforce it. Thus changing the remedy.

J. TRACINGSMITH (Lionel), “Tracing into the Payment of a Debt” – The Nature of Tracing

A plaintiff who is deprived of a thing might seek out that very thing in order to assert his rights. This is called following and it's about the thing itself. Tort-wise, it's proprietary (and it must be shown that this is still true).

Alternatively, the plaintiff might find that the original thing has been used to acquire some new asset: he might chose to assert his claim in relation to the new asset. This is called tracing120 and it's about the value of the thing. It's more like conversion, which is a personal tort (and past events are used to show the establishment of a right).

Foskett v. McKeown, [2001] 1 A.C. 102 (HofL)Facts. The Fosketts had paid Murphy some money so he'd investing in Portuguese real estate. Murphy used the money to pay 40% of his life insurance premiums, which was to go to his wife and children. Murphy committed suicide. The Fosketts claim that 40% of the £1M are held on CT. Issue. Is it the case?Holding. Yes (7:2)Reasoning. Millett. Where a trustee wrongfully used trust money to provide part of the cost of acquiring an asset, the beneficiary can either chose to enforce a claim for a proportionate share of the asset or to enforce a lien upon it. The fact that Murphy had mixed the trust money with his own didn't matter. Since the value is located, it is that value, which becomes bigger when converted into insurance, but is still the same value, proportionally speaking 121 that is owed to the beneficiaries. It's sad for the widow, but she can't get a better title than the settlor had and the settler was lacking 40% of his title, the 40% he has obtained in breach of his other trust (which he owed immediately upon breach). Accordingly, the appeal would be allowed, and the policy moneys would be divided in proportion to the contributions which the parties had made to the premiums. [Lords Hope and Steyn would have limited the plaintiffs to the recovery of the trust money used to pay the two premiums.]Ratio. It's just property and property can be traced.Comments. SS: property as property is a little thin an explanation –just about the vindication of proprietary rights? the HoL didn't want to use UE because that would more probably have given rise to a personal claim, not a CT. Birks sees the UE in another way, that would explain the CT: if the defendant kept the exchanged property (and you

get tracing instead), he'd be unjustly enriched. SS thinks fairness is a sufficient explanation.

K. DECLARATIONSCourts of Justice ActR.S.O. 1990, c. C.43, s. 97

Declaratory orders

s. 97. The Court of Appeal and the Superior Court of  Justice, exclusive of the Small Claims Court, may make binding declarations of right, whether or not any consequential relief is or could be claimed.  1994, c. 12, s. 39; 1996, c. 25, s. 9 (17).

120 The second process involves identifying a new asset which was acquired in exchange for the original thing. That process is called “tracing.”121 Fruits!

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