"Specific performance is an equitable remedy that is difficult to reconcile with the principle of mitigation. "
Oh dear, that is a sentence that makes one's heart sink.
The SCC has long been away with the fairies when it comes to whether to award specific performance of contracts for the sale of land. Now however it seems to have got itself confused about the relationship between mitigation and specific performance.
Simplified, this is a standard contract for the sale of land on a specific date. The seller fails to complete by that date, and then says it won't be completing and returns the deposit. The buyer refuses to accept this and presses for specific performance (or failing that damages).
Was the buyer under any duty to mitigate its loss at this point?
No, because a repudiatory breach that is not accepted is a thing writ in water. Although the obligation to sell by a particular date had been rendered impossible, the seller remained under a duty to convey the land to the buyer.
If the buyer had accepted the repudiation then the obligation to sell would have been brought to an end, replaced by an obligation to pay damages for breach, with a consequent "duty" on the buyer to mitigate his loss from that point. That did not happen.
Now in a country other than Canada, specific performance would have been awarded, but when it is refused the time for assessing damages should be the date of trial. There can be no 'duty' to mitigate for loss caused by the failure to sell before that time (see, in England unfortunately, Johnson v Agnew).
The rules relating to mitigation concern the quantification of loss. If a breach occurs, losses which are not suffered cannot be recovered, and consequential losses caused by the innocent party's own fecklessness in failing to avoid them are his own look out. There is not, and could not be, any tension between these rules and the availability of specific performance.
I have only read the SCC decision, and so may not have the full facts, but on its face this is not very good.
Rob