I disagree with Stephen, who
argues that the minority judgment of Chief Justice McLachlin
recognizes the inconsistency of requiring mitigation where a claim
for specific performance is validly pursued.
In my opinion, the majority decision written by Justice
Karakatsanis adds some welcome certainty with respect to the
relationship between a claim for specific performance and the duty
of a plaintiff to mitigate its damages. It is consistent with, and
reaffirms the Supreme Court of Canada's prior cases on the
availability of specific performance as a remedy in real estate
In its seminal case, Semelhago, the Supreme Court of Canada
stripped real estate of its "unique" character, stating
that "while at one time the common law regarded every piece of
real estate to be unique, with the progress of modern real estate
development this is no longer the case". As a result of that
decision, specific performance became available only where money
was inadequate to compensate fully for the loss, because of some
"peculiar and special value" of the land to the
In real estate development, the interest in the property is
monetary – the Courts have therefore stated that the
appropriate remedy is monetary. If a plaintiff claims specific
performance in a case where the goal is development and profit, it
should be clear that a claim for specific performance will not
obviate that party's obligation to mitigate its damages.
Indeed, a claim for specific performance will never obviate the
obligation to mitigate damages – rather, it "informs
what is reasonable behaviour for a plaintiff in mitigation",
as Justice Karakatsanis puts it.
Justice Karakatsanis further clarifies that in respect of the
duty to mitigate, the question is whether the plaintiff's
inaction was reasonable in the circumstances. If the plaintiff has
a substantial justification or a substantial legitimate interest in
specific performance, its refusal to purchase other property may be
reasonable in the circumstances of the case.
It is noteworthy that although Southcott Estates, a so called
"single use" corporation with no assets of its own, did
not mitigate its damages by purchasing alternative land for the
purpose of development, a related single use corporation did
purchase a different piece of land for development.
In the case of a typical land development, although there may be
a peculiar interest in a given piece of land and resources put into
the development of that opportunity, the Supreme Court of Canada
has made it clear that the developer will need to take reasonable
steps to mitigate their damages or face a pyrrhic victory after
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In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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