From: Jason W Neyers
<jneyers@uwo.ca>
Sent: Thursday 17 July 2025
15:56
To: obligations
Subject: ODG: Contributory Fault in
Contract Law at the SCC
Dear
Colleagues:
I just saw
that the SCC has given leave in Arcamm Electrical Services Ltd. v. Avison
Young Real Estate Management Services LP, 2024 ONCA 925 (41673) (https://www.canlii.org/en/on/onca/doc/2024/2024onca925/2024onca925.html?resultId=c952bd55b59b422f9511629b4d3cbdf1&searchId=2025-02-14T15:35:58:945/58a67fd92fcd4a88be658926cab6eeba)
to address the issue of whether damages in breach of contract actions can
be apportioned based on a defence of contributory fault in general and more
specifically in the context of a summary judgment motion. Hold on to your
hat!
Here are
the facts as prepared by the court:
4342 Queen St. Niagara Holdings Inc. owns
commercial property and Avison Young Real Estate Management Services LP is its
property manager. Following a power outage at the property, Arcamm Electrical
Services Ltd. provided emergency services to temporarily restore power and then
further services to permanently restore power. 4342 Queen St. Niagara Holdings
Inc. paid Arcamm Electrical Services Ltd.'s invoices for the emergency services
but refused to pay any further invoices. Arcamm Electrical Services Ltd. commenced
a claim for breach of contract. 4342 Queen St. Niagara Holdings Inc. claimed
contributory fault and sought an apportionment of damages. Arcamm Electrical
Services Ltd. was awarded summary judgment without any apportionment. The Court
of Appeal allowed an appeal and set aside the summary judgment in part. It held
the claim against Queen St. Niagara Holdings Inc. should proceed to trial and
Arcamm Electrical Services Ltd. can seek apportionment based on the alleged
contributory fault.
Here is
what the ONCA said on this issue:
... I understand this submission to rest on
the assumption that contributory fault cannot be raised as a defence to a claim
in contract.
[41]
I reject this submission and the assumption which underlies
it. There has been a long-standing debate about whether the courts can
apportion damages in a breach of contract case based on a consideration of the
'contributory negligence' of the parties. While recognizing that the Negligence
Act, R. S.O. 1990, c. N.1 does not apply to actions in contract, a number
of first instance decisions in Ontario, beginning with Tompkins
Hardware Ltd. v. North Western Flying Services Ltd. (1982), 1982
CanLII 3160 (ON SC), 139 D.L.R. (3d) 329, 22 C.C.L.T. 1 (Ont. H.C.J.), have
applied the principle that damages in contract can be apportioned based on the
degree of fault of the plaintiff and defendant. See, for example, Ribic
v. Weinstein (1982), 1982
CanLII 3170 (ON SC), 140 D.L.R. (3d) 258 (Ont. H.C.), aff'd (1984), 1984
CanLII 1869 (ON CA), 47 O.R. (2d) 126 (C.A.); Treaty Group Inc. v.
Drake International Inc. (2005), 2005
CanLII 45406 (ON SC), 36 C.C.L.T. (3d) 265, 15 B.L.R. (4th) 83 (Ont. S.C.),
aff'd on other grounds, 2007
ONCA 450[2]; K-Line Maintenance &
Construction Ltd. v. Scepter Corp., 2009 CarswellOnt 7398, 91 C.L.R.
(3d) 73 (Ont. S.C.), at para. 161; Atos v. Sapient, 2016
ONSC 6852, at para. 389;
and Parkhill Excavating Limited v. Robert E. Young Construction Limited, 2017
ONSC 6903, at para. 212.
Appellate courts elsewhere in Canada have similarly held that damages in
contract cases can be apportioned based on fault. See, for example, Coopers
& Lybrand v. H.E. Kane Agencies Ltd. (1985), 1985
CanLII 125 (NB CA), 62 N.B.R. (2d) 1, (N.B. C.A.), at pp. 707-708;
and Doiron v. Caisse populaire d'Inkerman Ltée (1985), 1985
CanLII 95 (NB CA), 17 D.L.R. (4th) 660, 61 N.B.R. (2d) 123 (N.B. C.A.), at
p. 273.
[42]
In Tompkins, Saunders J. gave compelling reasons
for holding that the courts should allow for the apportionment of contract
damages. He said that negligence on the part of a plaintiff should have the
same effect in reducing damages regardless of whether the claim is brought in
tort or contract. In his view, the principle in tort cases that where a person
is part author of their own injury, the person cannot call upon the other party
to compensate them in full, applies equally in contract cases: at para. 34.
[43]
In Treaty Group, Ducharme J. thoroughly canvassed
the caselaw and academic writing on the subject and applied the reasoning
in Tompkins. At para. 70 of Treaty Group, Ducharme J.
concluded that not only could he apportion damages in a contract action to
recognize conduct on the part of the plaintiff that had increased their damages
but, in appropriate cases, apportionment was 'required by fairness, equity and
justice'. I agree.
[44]
Finally, I note that in Cosyns v. Smith (1983), 1983
CanLII 1750 (ON CA), 146 D.L.R. (3d) 622, 25 C.C.L.T. 54 (Ont. C.A.)
Lacourciere J.A., writing for this court, considered the contributory fault
defence, describing it as 'analogous to contributory negligence' but where the
Court holds the basis of recovery against the defendants to be contract, not
tort: at para. 1. He reviewed the reasoning of Saunders J. in Tompkins,
but concluded that it was not necessary to pronounce on the 'attractive
conclusion' that Saunders J. had reached because the plaintiff's conduct did
not amount to contributory negligence.
[45]
I agree with the Ontario first instance courts that damages
in contract cases can be apportioned based on fault. Accordingly, in my view,
Queen was entitled to defend the Arcamm Action on the basis of contributory
fault, and to seek to have the contractual damages Arcamm claimed reduced to
recognize Arcamm's alleged conduct in increasing those damages.
Sincerely,
Jason Neyers
Professor of Law
Faculty of Law
Western University
Law Building Rm 26
e. jneyers@uwo.ca
t. 519.661.2111 (x88435)
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