Mitigating Losses

Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51 (CanLII)

[23] This Court in Asamera Oil Corp. v. Seal Oil & General Corp., 1978 CanLII 16 (SCC), [1979] 1 S.C.R. 633, cited (at pp. 660-61) with approval the statement of Viscount Haldane L.C. in British Westinghouse Electric and Manufacturing Co. v. Underground Electric Railways Company of London, Ltd., [1912] A.C. 673, at p. 689:

The fundamental basis is thus compensation for pecuniary loss naturally flowing from the breach; but this first principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps.

[24] In British Columbia v. Canadian Forest Products Ltd., 2004 SCC 38, [2004] 2 S.C.R. 74, at para. 176, this Court explained that “[l]osses that could reasonably have been avoided are, in effect, caused by the plaintiff’s inaction, rather than the defendant’s wrong.” As a general rule, a plaintiff will not be able to recover for those losses which he could have avoided by taking reasonable steps. Where it is alleged that the plaintiff has failed to mitigate, the burden of proof is on the defendant, who needs to prove both that the plaintiff has failed to make reasonable efforts to mitigate and that mitigation was possible (Red Deer College v. Michaels, 1975 CanLII 15 (SCC), [1976] 2 S.C.R. 324; Asamera; Evans v. Teamsters Local Union No. 31, 2008 SCC 20, [2008] 1 S.C.R. 661, at para. 30).

[25] On the other hand, a plaintiff who does take reasonable steps to mitigate loss may recover, as damages, the costs and expenses incurred in taking those reasonable steps, provided that the costs and expenses are reasonable and were truly incurred in mitigation of damages (see P. Bates, “Mitigation of Damages: A Matter of Commercial Common Sense” (1992), 13 Advocates’ Q. 273). The valuation of damages is therefore a balancing process: as the Federal Court of Appeal stated in Redpath Industries Ltd. v. Cisco (The), 1993 CanLII 3025 (FCA), [1994] 2 F.C. 279, at p. 302: “The Court must make sure that the victim is compensated for his loss; but it must at the same time make sure that the wrongdoer is not abused.” Mitigation is a doctrine based on fairness and common sense, which seeks to do justice between the parties in the particular circumstances of the case.

TSL-92308-18 (Re), 2018 CanLII 42869 (ON LTB)

13. Further, with respect to remedy, a number of principles arise from the case law. First, a landlord cannot be held financially liable for disrepair that the landlord was not aware of or could not reasonably be expected to have been aware of. This principle is reflected in subsection 30(2) of the Act and in the obligation to mitigate found in section 16 of the Act. Also, if a landlord responds in a timely and effective manner to most disrepair problems no remedy will flow. I believe this is because when landlords and tenants enter into tenancy agreements both parties reasonably expect that some disrepair will occur during the course of the tenancy and is a normal occurrence within the expectation of both parties. So, if such anticipated normal and minor disrepair problems arise and are dealt with efficiently and quickly no remedy will usually flow to the tenant.

14. Lastly, based on s. 16 of the Act, a tenant is expected to mitigate loss by, for example, cooperating reasonably with a landlord’s efforts to do repairs. If a tenant does not mitigate loss, then that may reduce any remedy ordered or disentitle the tenant to any remedy at all.

15. Considering, as I must, all of the circumstances as required by Onyskiw, I find, on a balance of probabilities, the Landlords are in breach of section 20(1) of the Act in connection with the issue of the water leak in the unit’s washroom by failing to meet the Landlords’ obligations to repair and/or maintain the rental unit and to comply with housing and maintenance standards and, further, by taking reasonable and timely steps to address the issue.