Canada: Back To Basics On Betterment: A Primer On Recent Judicial Decisions Pertaining To The Issue Of Betterment

The long established principle applicable to damages in tort actions is best captured by the Latin maxim restitutio ad integrum, which means that the damages shall be such as will, so far as money can, put the plaintiff in the same position as he would have been had the tort not occurred. Unfortunately, when dealing with a situation where a tortious act leads to damage of real property, the courts have had difficulty calculating how in fact a plaintiff should be compensated for their loss to coincide with the above maxim.

Where real property is damaged, the normal measure of damages is the diminution in value. This is typically described as the value lost due to a circumstance or set of circumstances that caused the loss. Specifically, it measures the value of something before and after the causative act or omission creating the lost value in order to calculate compensatory damages.

An alternative measure of damages for real property, is based on the cost of repair reduced by the amount to which those repairs will better the property; a concept known as betterment. Betterment denotes an addition to or enhancement of real property that increases its capital value and is designed to make the property more useful or have an increased market value. Betterment involves the expenditure of labour or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs.

Betterment and the Court's Interpretation

The leading case discussing the legal principle of betterment is James Street Hardware v Spirrizi.1 In James Street Hardware, the Court of Appeal of Ontario provided the following:

The answer lies in compensating the plaintiff for the loss imposed upon him or her in being forced to spend money he or she would not otherwise have spent - at least as early as was required by the damages occasioned to him by the tort. In general terms, this loss would be the cost (if he has to borrow) or value (if he already has the money) of the money equivalent of the betterment over a particular period of time.

In general terms, the Court in James Street Hardware intended that a plaintiff should recover the amount by which the property was improved deducted from the award but should also be compensated to the extent that he or she was required to improve the property prematurely. The Court in James Street Hardware, also pointed out that each case turns on its own facts and the process of assessing damages should be a practical one designed to do justice between the parties. The process should not be unnecessarily complicated or rule-ridden. The rules applied should be responsive to the particular facts of the case.2

A few years following James Street Hardware, the British Columbia Court of Appeal dealt with issues pertaining to the calculation of damages in a tortious action for real property in Nan v Black Pine Manufacturing Ltd.3 In Nan, the Court provided the following:

[D]amages shall be such as will, so far as money can, put the plaintiff in the same position as he would have been had the tort not occurred. The second is that the damages awarded must be reasonable both to the plaintiff and to the defendant. [emphasis added].

The result of the application of these principles, in most cases involving the tortious loss of or damage to property, will be that replacement costs will at least be the starting point for the assessment of damages. Whether or not the damages based on such costs should then be adjusted, either for pre-loss depreciation or post-reinstatement betterment, will depend on what is reasonable in the circumstances. No rules can be fashioned by which it can invariably be determined when such allowances should be made. It must, in all cases, turn on the facts peculiar to the case being considered.4

The Court of Appeal reasoned that the key factor in calculating damages in a tortious act against real property was the reasonableness of rebuilding the property. If same was reasonable, then the plaintiffs would be entitled to the full amount of the costs of replacing the real property, without deduction for either pre-loss depreciation or post re-instatement betterment.

Following Nan, the British Columbia Court of Appeal, in Laichkwiltach Enterprises Ltd. v. "Pacific Faith" (The)5 further addressed the issue of betterment by providing:

Betterment is a question of fact to be determined on the evidence and with regard to what is reasonable in the particular case. The starting point is the cost of repair. In some cases, that cost will also be the end point. In other cases, betterment will be proven and it will fall to the trier of fact to assess the extent of the betterment.

The above cases provide that cases where betterment may arise should be dealt on a case-by-case basis, led by evidence with regard to what is reasonable in the particular case and the starting point for an assessment of a deduction for betterment should start at the cost of repair for the real property. A trier of fact will take the above and make a determination as to the extent of betterment in each specific case.

Recent Ontario Decisions Pertaining to the Issue of Betterment

In Fors v. Overacker,6 the Plaintiff commenced an action for damages arising out of the Plaintiff's purchase of a house from the Defendants. The Plaintiff experienced significant water problems with the home relating to the sump pump system as well as deficiencies in the septic field, moisture in the basement and leaking from a skylight. The issue of betterment was raised by the Defendants and Third Party with respect to replacing the subject roof and the septic field. The parties contended that replacement of same would constitute betterment as the home was 23 years old and that a reduction between 50% to 75% was appropriate.

Justice Shaw writing for the Ontario Superior Court provided that the Defendant and Third Party did not lead evidence that the value of the subject house would have been enhanced if the skylight and septic systems were remediated or that if the remedial work had been done prior to the Plaintiff's purchase of the home that he would have paid a higher price for same as the purchase was completed under the assumption that these items were operating properly. In addition, the court provided that these expenses were as a result of the misrepresentation by the defendants and it would be inequitable to reduce the damages by some amount for betterment that was speculative.

In Gemeinhardt v. Babic,7 the Plaintiff purchased a farm property from the Defendants and discovered latent defects in the home and property, including flooding in the basement, a failed furnace and major structural defects among others. The Plaintiff commenced an action claiming damages for breach of the Agreement of Purchase and Sale. When turning to the issue of betterment, the Defendants argued that the Plaintiff was entitled to a new home and garage, which was to be constructed at extravagant cost, which resulted in betterment to the property.

Justice Di Tomaso writing for the Ontario Superior Court disagreed with this argument as the buildings on the property were determined to be a complete write-off and worth nothing due to the latent defects, which had to be replaced. The Court provided that there was no reasonable basis for granting any allowance for betterment since the claim was speculative and opined that the Plaintiff was entitled to the full cost of reinstatement. In addition, the Court provided that it was inequitable for the Plaintiff to suffer such a loss if a deduction from her damages for betterment were allowed. It was noted that no evidence was brought forward to demonstrate that the value of the house the Plaintiff purchased would have been enhanced if the basement water and septic problems were remediated or if the remedial work had been done before the Plaintiff had purchased the house or that she would have paid a higher price.

In Scaffidi-Argentina v. Tega Homes Developments Inc.,8 the owners of a five-unit residential rental property commenced an action following their property being rendered uninhabitable following the construction of a multi-unit condominium complex on the abutting property built by the Defendant. This case dealt with assessing pre-loss depreciation opposed to issues with betterment following remediation efforts as the subject property had yet to be remediated. Justice Sheard, writing for the Superior Court of Justice concluded that, in this specific case, the appropriate measure of damages was the diminution in the value of the property rather than the cost of replacement.

In Justice Sheard's reasons, it was noted that the Plaintiffs did not show that they intended to rebuild their property and it was not reasonable for them to do so. It was the onus of the Plaintiffs to lead evidence on the cost of rebuilding. The evidence led by the Plaintiffs, through their experts, was based on the construction of a building that did not resemble the pre-damage design. Further, the evidence was unclear as to what changes would be required to a new building to meet the current building standards or as to what additional costs were associated with meeting those new standards. The lack of evidence led by the Plaintiffs was their ultimate downfall in establishing that their damages should be assessed on a replacement value absent any deduction for pre-loss depreciation.

Other Recent Canadian Decisions Pertaining to the Issue of Betterment

In Yi v. Varadi,9 following the purchase of a home, a few potential problems with same were identified. The most important were relating to pillars located in front of the house, which were missed on inspection prior to purchase. Remedial work was carried out to ensure the pillars were safely installed in the ground following purchase of the house. The Provincial Court Civil Claims awarded damages to the Appellant for the Respondent's negligence.

On appeal, the Alberta Court of Queen's Bench upheld the trial judge's decision with respect to the deduction for betterment conferred by the remedial work on the Appellant's house. First, the Court provided that it was reasonable to use the cost of repair as the starting point for the determination of the value of betterment, as provided for in Laichkwiltach. Second, the Court agreed with the trial judge using "one quarter of the cost of repair" as the formula for deduction and assessed this calculation as reasonable and appropriate.

In Hik v. Redlick,10 a summary trial was held to assess damages caused to the Plaintiff's land by the Defendants. This summary trial as held following the Court of Appeal of British Columbia's reversal of the initial trial judge's dismissal of the action. In assessing a possible deduction for betterment, the British Columbia Supreme Court concluded that the Plaintiff's land resulted in a considerable betterment as rock was removed that would have otherwise formed part of the soil on the land in any event. The Plaintiff's claim for rockpicking, scraping and stockpiling was deducted in the sum of $20,000 to reflect what the Court considered work done beyond that which was probably necessary and to the betterment of the land. In addition, the Court also deducted $8,200 to reflect the betterment to the land that resulted from the construction of a block wall beyond what was probably strictly required to remediate the damages caused by the Defendant. In Hik, Justice Melnick writing for the British Columbia Supreme Court calculated a deduction for betterment by applying Laichkwiltach and Nan.


The above recent cases provide that betterment issues pertaining to real property will be determined on a case-by-case scenario and must be evidence driven. It is not fair for a defendant to simply speculate on the extent that a property may have been bettered without providing adequate evidence to substantiate the claim for a deduction. In addition, the above cases demonstrate situations where a court will likely refrain from apportioning a deduction for betterment on a Plaintiff's award for real property damages. As the cases provide, courts are hesitant to make a deduction for betterment when it would be inequitable to the Plaintiff to do so. This was evidenced in circumstances when an at-fault party has engaged in some form of misconduct that caused or contributed to the incident requiring the remediation efforts in the first place or where replacement of the property was made out of necessity with no alternative avenue for recourse at the time.

Ultimately, each case will be adjudicated on its individual merits. Nonetheless, counsel and adjusters a like should be aware of the nuances associated with seeking or defending a claim for deduction of a damages award based on betterment. The above cases are illustrative of situations in recent years where a claim for deduction have been successfully advanced or denied.


1. [1987] 2 O.R. (2d) 385 (Ont.C.A.) at para. 63. [James Street Hardware].

2. James Street Hardware, at para. 64.

3. 1991 CarswellBC 75, [1991] 5 W.W.R. 172, [1991] B.C.W.L.D. 1245, [1991] B.C.J. No. 910, 55 B.C.L.R. (2d) 241, 80 D.L.R. (4th) 153. [Nan].

4. Nan, at paras. 19-20.

5. 2009 BCCA 157, 2009 CarswellBC 869.

6. 2014 ONSC 3084, 2014 CarswellOnt 8909.

7. 2016 ONSC 4707, 2016 CarswellOnt 11908.

8. 2016 ONSC 5448, 2016 CarswellOnt 13960. [Scaffidi-Argentina].

9. 2013 ABQB 201, 2013 CarswellAlta 557. [Yi].

10. 2014 BCSC 1532, 2014 CarswellBC 2388.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions