REMEDIES FOR DELICTUAL AND

Transcription

REMEDIES FOR DELICTUAL AND CONTRACTUAL BREACH:
A QUÉBEC CIVIL LAW PERSPECTIVE
By: Martin F. Sheehan∗
__________________________________________________________
INTRODUCTION
Much has been said about the distinctiveness of the Québec Society. The curious reader will find
many texts on the subject.
The purpose of this conference is more modest and aims at fleshing out for the common law
reader the main aspects of the Civil Law contractual and extra-contractual regimes governing the
award of damages. Where relevant, we have attempted to highlight any significant differences
between the application of the law on damages in the Civil and Common Law regimes.
The remedies set out in the Québec Civil Code1 (“Q.C.C.”) vary according to the source of the
obligation. In other words, the remedies available for a complaining party depend on whether the
obligation arises out of a delictual (extra-contractual), or contractual fault.
Each person has a general duty not to cause injury to another person and to abide by rules of
conduct, which establish the ways in which it is acceptable to conduct one’s self according to
circumstances, usages, and law.2 When a person endowed with reason fails in that duty, he or
she3 is said to have committed a delict. One who commits a delict is responsible for any injury
caused to another person by such a delictual fault and is liable for the reparation for that injury
whether it is bodily, moral, or material in nature.4
Furthermore, there is also a duty to honour contractual commitments. When a party fails in that
duty, they will also be held liable for the reparation of the injury caused.5
These two regimes, delictual, and contractual, are separate and governed by somewhat distinct
rules. Notwithstanding, a contractual breach can also be analyzed as an extra-contractual fault,
which would have existed even in the absence of a contract. In theory, the victim would therefore
have the option of choosing between the contractual or extra-contractual regime. However, the
legislature in 1994 adopted section 1458 Q.C.C., which states that when the parties are governed
by a contract, the contractual rules in case of a violation will necessarily apply.6 This rule is
∗
1
2
3
4
5
6
The author is the head of the commercial litigation section of Fasken Martineau DuMoulin S.E.N.C.R.L., s.r.l.
(Montréal office). He would like to thank Julianna Fox and Rebecca McLeod for their invaluable assistance in
the preparation of this paper.
R.S.Q., c. P-40 [C.P.A.].
Section 1457 Québec Civil Code (Q.C.C.)
Henceforth, the masculine will be used inclusively to lighten the text.
Section 1457 Q.C.C.
Section 1458 Q.C.C.
Section 1458 C.C.Q.; See Royal du Canada Compagnie d’Assurance vs. Monsef [1995] R.R.A. 584.
-2further complemented by the existence in Civil Law of “deemed contracts”. For example, article
1730 Q.C.C. specifies that manufacturers of a product as well as each person who distributes
them under their own name (including the importer or wholesaler) is bound towards the buyer of
a product in the same way as the seller.7 As such, when a buyer of a product sues the
manufacturer, contractual rules would apply even though there is no privity of contract between
the parties.
As the rules relating to remedies can vary depending on the applicable regime, each of them will
be examined separately.
II
THE DELICTUAL OR EXTRA-CONTRACTUAL REGIME
A-
Introduction
An obligation confers to its creditor the right to demand that it be performed in full, properly and
without delay.8 Where the debtor fails to perform his obligation without justification, after
having been put in default to do so, the creditor can seek remedies from the Court, which may
include specific performance or performance by equivalence (i.e.: damages).9
B-
Default
Before seeking execution, a creditor must put the debtor in default to fulfill his obligations. The
notice of default can incite the debtor of the obligation to put an end to the faulty conduct in
order to avoid liability for future damages. It also serves notice that the creditor intends to take
steps to seek reparation for the default and thus gives the debtor time and opportunity to prepare
a defence.
A debtor can be in default by an extrajudicial demand to perform the obligation, by a judicial
demand filed against him, or by the sole operation of law.10
The objective of the extrajudicial demand letter constitutes a formal notice that the creditor does
not wish to prolong the delay, which had so far been granted to the debtor for execution of the
contractual terms. This extrajudicial demand must be made in writing. It must also give the
debtor sufficient time to perform the obligation having regard to the nature of the obligation and
the circumstances in question.11
If a judicial demand is filed without the debtor being in default to perform his obligations, costs
can be borne by the creditor if the debtor performs his obligation within a reasonable time.
A debtor can also be in default by the sole operation of law where the performance of the
obligation would have been useful only within a certain time, which he allowed to expire, or
7
8
9
10
11
Section 1730 Q.C.C.
Section 1590 Q.C.C.
Section 1590 Q.C.C.
Section 1594 C.C.Q
Section 1595 C.C.Q
-3where he failed to execute his obligation immediately, despite the urgency to perform.12 Debtors
are also in default by operation of law when the specific performance of the obligation becomes
impossible due to his fault or when he has made it clear to the creditor that he does not intend to
perform the obligation.13
The notice of default, which must always be in writing, succinctly sets out the existence of the
obligation and the nature of the default. The creditor must also indicate a delay under which he
considers that the debtor should execute his obligations. This delay must be reasonable. In the
absence of a notice of default, the judicial claim will be considered as proper notice. However, in
the event that the debtor executes his obligations within a reasonable delay after the judicial
filing, costs can be imposed on the creditor.
C-
Specific Performance
Section 1590 C.C.Q. places specific performance on top of the list of available recourses when a
debtor is in default of performing his obligation. A detailed analysis of specific performance is
beyond the scope of this paper. Nonetheless, it should be said that, in some cases, where the
breach is continuous or anticipated, Courts can, by injunctions or orders to safeguard the rights
of the parties, compel the debtor to perform an obligation.14 Specific performance can also mean
that the creditor has the right to perform the obligation or have it performed at the expense of the
debtor. The creditor who wishes to avail himself of the right must give notice to debtor.15
Over the years, specific performance has thus become a general right. However, specific
performance is reserved in cases that admit of it.16 An analysis of specific performance under the
contractual regime is provide later on in this paper.17
In cases where the creditor wishes to perform the obligation in the debtor’s place or cause it to be
performed at the expense of the debtor, the latter must necessarily have been notified either in a
judicial or an extrajudicial demand by which he will be placed in default.18 The creditor that
prevents the debtor to execute the obligation or to evaluate the costs may see his claim for
reimbursement of the costs dismissed.19
12
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14
15
16
17
18
19
Section 1597 C.C.Q.
Section 1597 C.C.Q.
Code of Civil Procedure of Québec, R.S.Q., c. C-25, s. 751ss.; Druker, The Emergence of specific performance is
a major remedy in Quebec Law, (1987) 47 Revue du Barreau; Gendreau et al., L’Injonction, (Cowansville :
Éditions Yvon Blais, 1998), at 45-90.
Section 1602 Q.C.C.
Section 1601 C.C.Q.
Section II C)
Section 1602 C.C.Q
See Nico-Métal Inc. vs. Ressources Audrey Inc., J.E. 2001-2035, REJB 2001-275-22 (S.C.), confirmed in appeal
by REJB 2003-39153 (C.A.); St-Laurent vs. Jacques Fortin Construction Inc., J.E. 2002-1813 (S.C.).
-4D-
Compensatory Damages
While specific performance does exist as a remedy for extra-contractual breaches, the truth
remains that the most common remedy to compensate a person who has suffered a loss as a
result of a delictual fault is damages. Under the extra-contractual regime, as in the case for other
remedies, a creditor will only be entitled to damages when the non-performance is a result of a
fault i.e.: when there is no justification for the breach of the obligation.20
The Q.C.C. provides that, when assessing damages, the damages due to a creditor should
compensate for the amount of the loss he has sustained and the profit of which he has been
deprived.21 Furthermore, the objective of these damages, appropriately named “compensatory”,
are to place the creditor in the situation in which he would have been had the breach not
occurred.22
Moreover, the Civil Code places three (3) additional conditions before compensatory damages
can be awarded. First, the damages must be an immediate and direct consequence of the debtor’s
fault. Second, the damage must be certain and ascertainable, and finally it must be a foreseeable
consequence of the fault.23
First, they must be an immediate and direct consequence of the debtor’s fault. In saying that the
prejudice must be a direct consequence of the default, the legislator is simply reaffirming the
requirement of establishing a causal link between the fault and the prejudice. A jurisprudential
analysis reveals that the determination of what constitutes a direct consequence of default varies
greatly according to the circumstances and facts of each case24. For example, the cost of a loan,
which was contracted to compensate for a loss incurred, is usually considered as indirect
damages.25 Another example is when an intermediate third party to an obligation causes damage;
the court will not always find that damages thus incurred are a direct result of the obligations
contracted.26
Second, the Q.C.C. requires that the prejudice be certain and ascertainable. Future prejudice may
be claimed but the party claiming the future prejudice must demonstrate its probability of
20
21
22
23
24
25
26
Section 1590 Q.C.C.
Section 1611 Q.C.C.
Baudoin & Jobin, Les Obligations, 6th ed., (Cowansville : Éditions Yvon Blais, 2005), at 877.
Section 1607, 1611, 1613 Q.C.C.
For examples, see Chambly Manufacturing Co. vs. Ouellette [1904] 34 R.S.C. 502; Québec Land Co. vs.
Giguère (1926) 41 B.R. 551; Roy vs. Simard (1927) 43 B.R. 538; [1928] R.S.C. 328; Duranceau vs. Handfield
(1930) 49 B.R. 507; St.Lawrence Bakery Ltd. vs. Brault (1939) 66 B.R. 507; Ouellette Motor Sales Ltd. vs.
Standard Tobacco Co. [1960] B.R. 367; Reimer Brothers Investment Corporation vs. Robin [1965] B.R. 889;
[1966] R.S.C. 506; King Street Shopping Center Ltd. vs. Faby & Fils Ltée [1970] C.A. 93; Matapedia Co. vs.
Interprovincial Lumber Co. [1972] S.C. 160; [1973] C.A. 140; Entreprises Jean M. Saurette Inc. vs. Noiseux
[1975] C.A. 198; Lapointe Transport Ltée vs. Procureur Général du Québec [1975] C.A. 481; Sénécal-Crevier
vs. Limoges [1975] S.C. 199; Guy Goyette Pompe et Réfrigération inc. vs. Banque Nationale du Canada [1996]
R.R.A. 826 (S.C.).
Léger vs General Accident, [2006] R.R.A. 268 (C.A.); Tremblay vs Gingras (8 mai 2002), Québec 200-09003166-003, B.E. 2002BE-487 (C.A.)
2966-5668 Québec Inc. vs. Corporation des maîtres électriciens du Québec, J.E. 96-701 (S.C.).
-5occurring.27 For example, when talking about lost profits, courts will usually not allow
compensation for uncertain future profits.28 In addition, in order for the prejudice to be
ascertainable, it must be easy to evaluate at the time the courts are called to assess the damages29.
Article 1457 Q.C.C. lists three different kinds of damages: material, bodily and moral. To these,
we can add punitive damages, which can exceptionally be awarded when the law allows it.30
Each of these will be considered under a different heading.
1)
Material Damages
a)
When are material damages awarded?
In general, material damages refer to damages caused to a person’s property or patrimony.
Courts can award damages for injury to a person’s property in situations where it has been
completely destroyed, has been damaged or has deteriorated and where the victim has incurred a
loss as a result of the injury to the property.
b)
When are material damages awarded?
When awarding for damage caused to material goods, the Courts balance two considerations. On
the one hand, the judge strives to ensure that the damage award does not enrich the victim. On
the other, the Court wants to ensure that the victim is provided with adequate compensation for
their loss.31
Material damages are relatively easy to evaluate.
Generally, damages to compensate for the loss of an item are based on an assessment of the
market value or economic value of the object.32 However, the evaluation of the amount of
damages will depend on whether the property had a purely market value or whether the property
had a subjective value to the plaintiff. For example, in the case of illegal tree cutting, if the value
of the trees to the plaintiff is economic, then the plaintiff will be compensated for the market
value of the trees. However, if the trees are of sentimental value to the plaintiff or the plaintiffs
have other reasons to be upset with the loss of the trees, then the evaluation will be based on
different principles. For example, in one case, the defendants cut down two very old trees located
on the property of the plaintiff. These trees were both very old and found to be irreplaceable.
27
28
29
30
31
32
See for example Acoca vs. General Motors of Canada [2001] R.R.A. 180 (S.C.); Uni-Select vs. Acktion
Corporation [2002] R.J.Q. 3005 (C.A.); Aéroport de Montréal vs. Hôtel de l’aéroport de Mirabel [2003] R.J.Q.
2479 (C.A.).
Mutuelle du Canada vs. Excelsior Compagnie d’assurance-vie [1988] R.J.Q. 1866 (S.C.), confirmed by [1992]
R.J.Q. 2666 (C.A.); Labbé vs. Placements Hector Poulin [1989] R.J.Q. 331 (S.C.).
Section 1621 Q.C.C.
Baudouin, Jean Louis et Patrice Deslauriers, La responsabilité civile 5e edition (Cowansville: Les Éditions Yvon
Blais Inc., 1998) para 302.
-6The defendants had cut down the trees, not realising that they were located on the plaintiffs’
property. The trees did not have any marketable value for the plaintiffs, so the determination of
the quantum of damages was based on the expert testimony of a forestry engineer who set the
value of the trees based on the standards set out by the International Society of Arboriculture.33
The court also took into consideration the fact that the trees were very old and that their loss had
altered the physical appearance of the neighbourhood.34
The amount of damages will of course vary depending on whether the property has been
completely destroyed or has simply deteriorated.
In situations where the property has been completely destroyed, or has been rendered unusable,
the victim should theoretically receive the amount required in order to replace the item less
depreciation. Indeed, in calculating the amount of damages to be awarded for the object, factors
such as inflation, age of the object and its rate of deterioration will all be factored in. Using the
replacement cost ensures that the victim is not penalised if the amount it paid for the property is
no longer relevant due to inflation or increase in value. On the other hand, applying a
depreciation factor ensures that the victim is not enriched by receiving a new item when the item
that was destroyed had already lost value as a result of normal wear and tear.35
Take the example of a boat owner who wants to be compensated for the destruction of his boat as
a result of a fire. If the boat owner has owned his boat for a certain number of years prior to the
fire, the amount of the damages may reflect, the value of the used boat on an open market or will
use the replacement value of the boat, minus a percentage for depreciation. Indeed, if the boat
owner is provided with the replacement value of a new boat, then he or she would be enriched
because they would be compensated beyond the value of the boat was when it was destroyed.36
In situations where the fault causes deterioration of the property, the court will award damages in
terms of the cost to repair the item. In those cases where the repairs will lead to an increase in the
value of the good, the courts will deduct an amount from the cost of the repairs to account for
this increase in value.37 In cases where the cost of the repairs would exceed the value of the item
itself, the court will limit damages to the depreciated value of the property.38 In addition to the
value of the good destroyed or damaged, the court can also award damages to compensate for the
loss of use of the property.39
33
34
35
36
37
38
39
These standards included consideration of the kind of species of tree, the condition of the tree and its location.
Longueuil (Ville de) c. Jabour, J.E. 94-924 (Q.C.) See also Larouche c. Hydro-Québec, [2002] R.R.A. 562 (S.C.)
Ibid. p. 7.
Taken from Baudouin, Jean Louis et Patrice Deslauriers, La responsabilité civile 5e edition (Cowansville: Les
Éditions Yvon Blais Inc., 1998) para 305.
Example taken from Deslauriers, Patrice "L’indemnisation résultant d’une atteinte à un bien." Collection du
droit 2006-2007, École du barreau du Québec, vol. 4, 2006.
Éditions Yvon Blais Inc., 1998) para 306. CASES
Bell Canada c. Janacek, [1998] R.J.Q. 1625 (C.Q.)
Éditions Yvon Blais Inc., 1998) para 307.
-7c)
Differences between the Civil and Common Law
Pecuniary damages for loss of property are compensated in roughly the same manner in the
Common Law. The Common Law allows for the compensation for the lost property,
compensation for the loss of the use of the property and for any defect or deterioration, which
may have occurred.
2)
Damages for Bodily Injury
a)
When are damages for bodily injury awarded?
Damages for bodily injury are awarded when a victim is wounded or suffers an attack on their
bodily integrity. Damages for bodily injury include a pecuniary element (material) and a nonpecuniary (moral) element.40 In certain cases, bodily injury may also lead to the award of
punitive damages. Non-pecuniary (moral) damages and punitive damages will be examined
under their own special heading.
The evaluation of damages for bodily injury was reviewed in depth by the Supreme Court of
Canada in three important cases referred to by many as the “trilogy”: Andrews v. Grand and Toy
Alberta Ltd,41 Thornton v. Board of School Trustees of School District42 and Arnold v. Teno.43
The trilogy required courts to apply a more rigorous and scientific approach to evaluate awards
for bodily injury.
It has been generally accepted that even though those cases were of Common Law origin, they
also apply to damages for bodily injury in Québec, with certain reservations regarding the award
of damages for non-pecuniary damages.44
Bodily injury damages fall into two main categories: pecuniary and non-pecuniary losses. We
will deal with pecuniary losses in this section and non-pecuniary losses in the section on moral
damages.
b)
How are pecuniary damages for bodily injury evaluated?
Pecuniary losses for bodily injury are awarded under the following heads: loss of revenue (while
injured and loss of earning capacity after the injury), cost of care and various medical costs
incurred as a result of the injury.
i)
Loss of income (TTI, TPI and PPI)
Usually, the inability to generate income is the most important pecuniary loss for a person who
has suffered bodily injury. This pecuniary evaluation of this loss requires an assessment of how
40
41
42
43
44
Vézina, Natalie "Préjudice matériel, corporel et moral: Variations sur la classification tripartite du prejudice dans
le nouveau droit de la responsabilité" (1993) 24 R.D.U.S. 161, at p. 169.
83 D.L.R. (3d) 452.
[1978] 2 R.C.S. 267.
[1978] 2 R.C.S. 287.
See below under Differences between Common and Civil Law.
-8much an injury reduces a person’s capacity to live a productive life. A person’s incapacity can be
characterised as total as opposed to partial and as permanent as opposed to temporary.
The incapacity is partial when a person is unable to work to the full extent they were able to
before and to enjoy their life as they normally did before the accident. However, the incapacity
is total where the person is left unable to work at all and their ability to live a normal life is
destroyed.45 While not totally subjective, the evaluation can certainly vary according to the
training, experience and age of the victim. As Baudouin points out, the loss of a finger has a
different meaning for a pianist than for a lawyer.46 Courts measure the level of incapacity in
percentages (a 0% finding means the person has suffered no incapacity and a 100% value
meaning the person is totally disabled). To determine the percentage of disability that afflicts a
person following an injury, the court relies heavily on testimony from doctors and other medical
professionals. The determination of the incapacity level is relevant to assess the damages in
terms of lost revenue as well as in the determination of the non-pecuniary damages later on.47
Secondly, this percentage can vary in time. A person can be totally disabled for a period of time
following the accident and slowly regain strength until no further progress is possible. The injury
can thus result in either a temporary or permanent incapacity. For example, a broken arm causes
a temporary incapacity as the injured person cannot use their arm for a few weeks, but once it is
healed he is able to use it again. However, the broken arm could result in a permanent incapacity
where the victim is never able to use his arm as he had before, even after it is considered to have
healed medically speaking. In this case, a victim may claim an amount for the past temporary
incapacity of their arm and an amount for the future permanent incapacity.48
Using varying combinations of the above concepts, the Courts have coined different phrases,
which, when used together, help to give a clearer picture of a person’s loss of income. The three
main combinations can be described as Total Temporary Incapacity (“TTI”), Temporary Partial
Incapacity (“TPI”) and Permanent Partial Incapacity (“PPI”).
As its name implies, Total Temporary Incapacity or TTI refers to the period of time a person was
unable to work following the accident. This period includes the period of time the victim is in the
hospital or at home on disability leave. The value of TTI is usually easy to determine, it being
equal to the salary that a person did not earn during the period of disability.
If the person returns to work gradually, there can be varying periods of Temporary Partial
Incapacity or TPI during which a person can work a reduced schedule. Again, the measure of the
loss is usually equal to the lost salary.
45
46
47
48
-9It should be noted that disability payments (either by the employer or by the insurer) are not
considered when assessing the value of TTI or TPI. Indeed, Article 1608 Q.C.C. states that any
amount a victim receives from third persons cannot be used to reduce the amount of damages
that a person receives further to an injury unless this third person is subrogated in the rights of
the victim.
Finally, Permanent Partial Incapacity (“PPI”) measures a person’s permanent incapacity.
Because this measure presupposes that there are no favourable prognoses for improvement, the
medical examination that establishes the PPI is usually done long after the accident.
Compensation for PPI can include an amount to compensate loss of salary related to the
incapacity before trial as well as an amount to compensate for future lost revenue. Again, while
lost salary at the date trial is easier to evaluate, the quantification of future salary losses can be
more complex.
Using the PPI percentage, the Court will usually translate the percentage into a monetary value.
In this evaluation, the court will factor in the training, experience and age of the victim. The fact
that the evaluation is difficult should not deter the court from providing adequate compensation.
For example, when the victim is a minor child that has yet to find employment, the courts have
not hesitated to use grades received in school as guidance to determine future success. Similarly,
the fact that a person is retired, should not prevent them from obtaining compensation for PPI.
This being said, the compensation is generally less and focuses primarily on the non-pecuniary
nature of the loss.
The courts will also make adjustments to the damages awarded based on the changes which
occur during the subsequent years due to inflation and on the tables which are to be relied upon
in the setting of damages.49 Tax considerations are also taken into account in the award of
damages.50 The court will also take into account the victim’s personal factors that, if not
calculated into the damages, could result in overcompensation.51 However, this part of the
calculation is not supposed to be applied automatically. Instead, it is meant to be applied only if
there is evidence that it should be, such as cases of a high-risk job or one with many periods of
unemployment.52
In order to illustrate how the above outlined percentages of incapacities translate into monetary
amounts, here are two examples from Québec jurisprudence.
In Leblanc c. Commission scolaire des Îles,53 the plaintiff slipped on the ice in a parking lot
behind the school run by the defendants. The plaintiff seriously injured her ankle in the fall. The
court found that the defendant had been negligent in their supervision of the employee who was
in charge of maintaining the parking lot. However, the court also found that the plaintiff had
49
50
51
52
53
Section 1614 Q.C.C..
Blais Inc., 1998) para 332-333.
Lewis c. Todd, [1980] 2 R.C.S. 694.
Deslauriers, Patrice “L’indemnisation du préjudice corporel » Collection du Droit 2006-2007, Ecole du Barreau,
vol. 4. p. 4.
B.E. 2006BE-1118 (S.C.) [Leblanc]
- 10 contributed to the gravity of her injury through a combination of carelessness and the fact that
she was wearing inappropriate footwear. As such, the court determined that she was partially
responsible for her injury. The result was that any damages awarded would be divided in half.
Prior to setting out the calculations and considerations taken for each head of damages, the court
sets out the characteristics of the victim. Of particular importance are her age, 41 years old, and
the fact that she is a stay at home mother of two children.
The Court determined that her total temporary incapacity (TTI) lasted nine months. The Court
awarded her two amounts $2 700 and $3150 to compensate her for the money she paid to have
two women look after her children during the total time of her incapacity.
The Court then calculated the permanent partial incapacity (PPI) of 3.5%. The Court assigned
this percentage after having read the medical report provided by Dr. Jean-Marc Lépine, an
orthopaedic surgeon. In his report, Dr. Lepine outlines the physical limitations as a result of the
plaintiff’s injury including her inability to place weight on her ankle or to walk long distances
without discomfort. The court concluded that, given the nature of her injury, her present physical
limitations, her age and her everyday activities, the court determined that she should be awarded
$20 000 for this incapacity.54
The court also awarded the plaintiff $1 500 for other medical expenses, including the cost of an
expert and other medical expenses incurred due to her injury.
Another example which may prove useful is that of someone who was employed at the time of
their injury. This is the case in Gariepy c. 9016-5440 Québec inc.55 In this case, the plaintiff fell
down the stairs of the defendant’s premises, where the defendant had not cleared the snow,
provided any protective stripping on the stairs or ensured that the stairs were in conformity with
regulations. The plaintiff fractured her ankle as a result of the fall. The Court did find that the
plaintiff had also contributed somewhat to the fault, and the damages awarded were lowered
proportionally with her responsibility.
In evaluating the total temporary incapacity (TTI), the Court took into account the weekly
revenue of the plaintiff ($466.20). The Court found that the plaintiff had suffered total temporary
incapacity for 41 weeks, which, multiplied by $466.20 adds up to $19 122.40, which was the
amount awarded in damages.
In evaluating the permanent partial incapacity (PPI), the Court based itself on the evidence
provided by the expert witnesses that the percentage should be set at 13%. The experts came to
this number taking into account the long and painful convalescence endured by the plaintiff. The
Court then decided that, given that this incapacity was significant and would alter the plaintiff’s
life, the plaintiff should be awarded $45 000 under this heading.
54
55
The evaluation of the non-pecuniary damages are provided later on in the text, under the heading of the
evaluation of non-pecuniary damages due to bodily injury.
B.E. 2006BE-485 [Gariepy]
- 11 The court also awarded $2 550.43 in various medical costs incurred by the plaintiff as a result of
the injury.56
ii)
Cost of Care
The defendant is liable for all costs of care associated with the plaintiff’s injury. These include
medical costs not covered by social security, paramedic costs, pharmaceutical costs, nursing
care, rental of hospital equipment if necessary. Basically, the defendant is liable for all costs of
care which are proven, direct and reasonable in light of the circumstances of the victim’s
circumstances.57 The defendant is also liable for the future costs of care in cases where the victim
has suffered a severe injury. The plaintiff may decide to live in a long-term care facility or to
stay at home. If the plaintiff chooses to live at home, the defendant is liable for all costs required
to renovate the home for their use such as the installation of handrails in homes, the renovation
of bathrooms etc. Of course, the defendant will only be liable for those costs not covered by
social security.58
The plaintiff may also claim transportation costs incurred as a result of their injury, as well as the
costs of home care provided by live in medical professionals.59 In the awarding of these kinds of
damages, the court will also have to take into consideration the life expectancy of the victim
along with the capitalisation of the future amount.
Indeed, calculation of a victim’s life expectancy is used to determine the length of time that
special care will be provided. This determination is made using government tables, which
combine age, sex and types of injury in order to determine the life expectancy of a victim. The
results of the analysis of these tables provide two pieces of information: the life expectancy of
the person before their injury and the life expectancy of the person after their injury.60 Both are
used to calculate the additional cost of care caused by the accident by comparing cost of care to
the end of life before the injury and future costs of care to the end of life after the injury.61
iii)
Miscellaneous Expenses
Finally, the defendant will also be liable to pay for miscellaneous costs associated with the injury
such as the ambulance ride and other hospital administrative expenses involved in dealing with
the injury right after it has occurred.
56
57
58
59
60
61
The evaluation of the non-pecuniary damages are provided later on in the text, under the heading of the
evaluation of non-pecunairy damages due to bodily injury.
Blais Inc., 1998) para 340. Also see Section 1607 Q.C.C..
Blais Inc., 1998) para 341 and 342.
- 12 c)
Pecuniary damages for bodily injury are compensated in roughly the same manner in the
Common Law.
3)
Moral Damages
a)
When are moral damages awarded?
Moral damages are awarded as compensation for non-pecuniary loss. Moral damages are
generally awarded in conjunction with other kinds of damages. Moral damages can also be
awarded in the context of property damage, bodily injury, and in that context are classified as
non-pecuniary loss.
Outside of the categories of non-pecuniary damage mentioned above, the Civil Law also
recognises compensation for other forms of moral (les dommages extra-patrimonials) or nonpecuniary damages.
The other forms of moral damages fall under several categories. One of these categories is the
breach of those rights protected under the Québec Charter of Rights and Liberties.62 The result of
this new regrouping of rights, and section 49 is the possibility of the compensation for moral
damages on the same footing as material damages.63 It must be pointed out that the Charter has
not created a new system of civil liability however.64 These rights include the right to life,
personal security, inviolability and freedom.65 The violation of rights falling under this
classification can result in compensation of non-pecuniary damages, particularly in the case of
bodily injury. The right to privacy is another area which is protected and violation of which will
lead to non-pecuniary damages. This right includes the protection against unjustified intrusion
into personal life, and against the distribution of personal information.66 The right to freedom is
also contemplated, along with the right to honour.
One important protected right is the right to reputation. Defamation often includes attack on
reputation whether verbal or written, public or private causing injury can be the subject of
compensation under Civil Law. Defamation requires a fault, which can originate from two
separate kinds of conduct. The first, is where the defendant knowingly attacks the reputation of
the victim in order to ridicule, humiliate or publicly undermine that person. The second kind is
similar to the first, just without malicious intent. It must be noted that it is not just the person
uttering the defamatory words or actions but also the person who distributes the defamatory
62
63
64
65
66
R.S.Q. c.C-12. [Charter]
Charter, section 1.
- 13 information who may be open to liability.67 It must be noted as well, that damages for
defamation can have a pecuniary and non-pecuniary element. Such pecuniary elements may
include loss of revenue, loss of sales following the defamatory action. Also, the psychological
impact of the damage and possible effects of this on their capacity to work and make revenue
should also be considered.68 Most of the time however, the damages in cases of defamation
sought are for moral damages.
Another area of compensation under non-pecuniary damages is following the injury or death of a
close family member. For a long time, the courts in Québec refused to recognise the head of
damages of compensation following the accidental death of a loved one, also known as solatium
doloris. At first, it was recognised that the pecuniary aspects of an accidental death could be
provided for, but not the non-pecuniary aspects. Such aspects would include nervous shock and
other grief related illnesses.69 Now, however, the Québec courts recognise this as a head of nonpecuniary damages.70
b)
How Are Moral Damages Evaluated?
Because of the non-pecuniary nature of moral damages, their evaluation is difficult. Indeed, who
can put a monetary value on pain and suffering or loss of enjoyment of life? Recognising that the
difficulty of evaluating non-pecuniary damages can lead to inconsistencies in the Courts’
decisions, the Supreme Court of Canada imposed a ceiling on the award of non-pecuniary losses.
In 1978 this amount was $100 000. Today, with the rate of inflation the ceiling is about $300
000.71
The following description of the evaluation of moral damages applies in the Civil Law to all
manner of moral damages. In cases where there are nuances, they are mentioned later on.
In Andrews, the Supreme Court rejected both the conceptual and personal approaches to
awarding moral damages.72 Under the conceptual approach, intangible losses are seen as lost
property and are treated as if they were lost assets. For example, damages awarded for a victim’s
pain and suffering are compensation for the loss of being free from pain and suffering. Here,
every faculty is treated as a proprietary asset that has an objective value.73
67
68
69
70
71
72
73
Deslauriers, Patrice “L’indemnisation du préjudice corporel » Collection du Droit 2006-2007, Ecole du Barreau,
vol. 4. p. 10.
Cooper-Stephenson, Ken Personal Injury Damages in Canada, (Toronto: Carswell, 1996.) at 494.
Curateur public c. Syndicat national des employés de l’hôpitalSt-Ferdinand [1996] 3 R.C.S. 211 (S.C.C.) para
57. [Ferdinand]
- 14 The personal approach emphasizes the personal impact of the accident on the person. Under this
approach, compensation is based on the amount of happiness actually lost due to the injury.
There are then two components to the assessment of compensation, the happiness objectively lost
and the loss of happiness subjectively felt by the victim.74
Instead, the Court adopted the functional approach which, “rather than attempting to set a value
on lost happiness, attempts to assess the compensation required to provide the injured person
with reasonable solace for his misfortune. Money is awarded, not because lost faculties have a
dollar value, but because money can be used to substitute other enjoyments and pleasures for
those that have been lost”.75
However, many authors have criticised this functional approach for deciding whether or not a
victim must be awarded moral damages. Under Québec Civil Law, the main objective is to
compensate for a prejudice. As explained by Madam Justice L’Heureux-Dubé, the purpose of
compensating for prejudice “requires that there be compensation for the loss suffered or the
opportunity for profit lost because of the wrongful conduct, regardless of whether the victim is
capable of enjoying the substitute pleasures.”76
While the functional approach was rejected under Civil Law for the purpose of determining
whether or not a victim may be awarded moral damages, it was recognised that the functional,
along with the conceptual and personal approaches could be used in order to calculate as assess
the amount of damages.77
Under the Civil Law system, moral damages are awarded in the following contexts:
i)
Non-Pecuniary Damages for Bodily Injury
Unlike other systems, which find these damages problematic, in Civil Law, non-pecuniary losses
are seen as objective losses which must be compensated for.78 Damages for non-pecuniary loss
for bodily injury are sometimes awarded under the following heads: pain and suffering, loss of
enjoyment of life and aesthetic prejudice.
a)
Pain and Suffering
The award of damages for suffering includes the physical and the mental suffering associated
with bodily injury.79 The problem with the assessment of suffering is that it tends to be very
subjective, as injuries affect people differently. The most important factor in the assessment of
the suffering is the nature of the injury sustained, along with the length of the suffering endured
by the victim. For example, the length of the hospital stay, the number of operations, use of pain
74
75
76
77
78
79
Cooper-Stephenson, Ken Personal Injury Damages in Canada, (Toronto: Carswell, 1996) at 494.
Lindal c. Lindal, [1981] 129 D.L.R. (3d) 263 at 269.
Ferdinand para 71.
Ferdinand para 71.
Ferdinand para 67.
- 15 medication are all important factors. The amount awarded will represent the suffering that has
occurred, and will take into account future suffering related to the injury as well. The assessment
of suffering can also take into account the psychological changes in the person injured, for
example neuroses caused by the injury, post traumatic stress and personality changes.80
b)
Loss of Enjoyment of Life
Damages are awarded under the head of loss of enjoyment of life in order to compensate the
victim for the extent to which the injury has affected their capacity to enjoy the intellectual,
athletic and social activities.81 In calculating how much to award in damages the courts will
consider the diminished mobility of the victim, the effect of the injury on their activity level.
The courts have also recently awarded damages under this heading for the shortened life
expectancy resulting from an injury. The relatives of a victim who has deceased can file a claim
for this kind of compensation.82
c)
Aesthetic prejudice
The right to bodily integrity is the central theme behind the compensation provided for
disfigurement caused by an injury.83 Disfigurements can be the cause of many problems for a
victim. It can inhibit their social interactions, lead to difficulties getting a job or feeling at ease in
general, not to mention the destructive effects that the physical implications of an injury can have
on a person’s psyche. In the determination of the amount of damages, the court will consider
both the subjective effect of the scarring as well as on the objective nature of the scarring, for
example how visible the scarring is. In the evaluation of the damages, such aspects as the age,
marital status and the gender of the victim play a role.84 In cases where the scarring or
disfigurement will affect the capacity of the victim to earn a livelihood, as may happen in jobs
where the victim relies on their looks, the court will consider these factors when determining the
loss of the victim’s earning capacity. In these cases, the court may even award amounts required
to improve the scarring, such as amounts for plastic surgery.85
For an example of how the Court assesses non-pecuniary damages, let us take the case Leblanc,
dealt with above, where the woman slipped on the ice outside the school and injured her ankle.
The Court analysed the damages for aesthetic prejudice suffered and general suffering together.
The Court determined that the plaintiff suffered an aesthetic prejudice of 2.3%. This is following
the description of the scarring provided by Dr. Lépine (the orthopaedic surgeon) who provided
80
81
82
83
84
85
- 16 an estimate as to the value of the total percentage of her aesthetic prejudice. In assessing the
plaintiff’s general suffering and inconvenience caused by the accident, the Court noted the
presence of the metallic posts in her ankle, which were required following the accident. They
also took note of the physiotherapy she had to continue in order to rehabilitate, along with the
continuing discomfort due to the injury. They also considered how the injury limited her
functioning and prevented her from doing many of the activities she had previously enjoyed.
The Court concluded, after having taken into account all of these amounts, that the plaintiff was
entitled to a total of $14 000 for her non-pecuniary losses due to the accident.
Another example of how the court assesses non-pecuniary damages in the context of bodily
injury is the award in the Gariepy case summarised above. When evaluating the non-pecuniary
damages, the Court looked at the life of the plaintiff before the accident. The plaintiff had been
an active, athletic woman. She had enjoyed skating, cycling, cross-country skiing and dancing.
She had also lead an active social life. Her injury has made it impossible for her to enjoy any of
these activities anymore. The Court also took into consideration the fact that the plaintiff’s
recovery was very slow and painful and that her treatment would have to continue for the rest of
her life. As a result of all of these factors, the Court awarded the plaintiff the sum of $12 000.
ii)
Moral damages for Material Damage
In the context of damage to property, or material damage, moral damages may be awarded if the
loss of the property has lead to upset, sadness, loss of enjoyment86 or inconvenience.87 These
damages are rarely broken down, and represent the court’s appreciation of the plaintiff’s loss of
enjoyment or pain and suffering. For example, in Wilson, the damages for pain and suffering
were awarded after the court analysed the plaintiff’s fondness for the horse, including that the
plaintiff was very attached to the horse, rode it very often and the horse was a source of
enjoyment and happiness for her.88
iii)
Other kinds of moral damages under the Civil Law:
a)
Charter and Defamation
Under the Civil Law, non-pecuniary damages are awarded in cases of defamation. The amounts
awarded for damages in defamation cases depend on whether the defamation was conducted with
intent or not, and whether or not the court views the defamation as gravely prejudicial or not.89
The amounts awarded under this head are meant to repair the damage caused by the humiliation,
hate or ridicule which result from the defamatory action. Sometimes, the courts will award a
86
87
88
89
Deslauriers, Patrice « L’indemnisation résultant d’une atteinte à un bien. » Collection du droit 2006-2007, École
du Barreau du Québec, vol 4 2006.
Propane Frigon inc. c. Québec (Régie de l’electricité et du gaz) REJB 2001-27646 (S.C.). Moral damages have
also been awarded in the context of loss of an animal, see Wilson c. 104428 Canada Inc. REJB 2002-33515
(S.C.) [Wilson].
Wilson, para 202.
- 17 symbolic global amount, but often the courts are generous.90 Also, in the cases of intentional
defamation, the courts will award punitive damages.91
The factors which are taken into consideration when evaluating the damages are: the gravity of
the act—whether it was an off-hand remark or a more substantial attack. While the intent of the
author has little influence on the determination of the existence of a fault, it will have an effect
on the evaluation of the prejudice. The court will also deal strictly with those who repeat the
defamation in court or who succeed in ruining the plaintiff with their defamation.92 The spread
of the defamation also plays a role.93 For example, a large audience will result in a larger
compensation.
In Hill,94 the Supreme Court rejected the limit on the amount of damages in defamation cases,
mainly on the grounds that the trilogy had designed the limit in order to comply with the specific
problems arising in the context of non-pecuniary damages for bodily injury.95 However, certain
Québec authors assert that the limit on damages should apply in defamation and assert that the
limit is only applicable in the Common Law provinces because there is no reason to treat
prejudice caused by damage to the reputation differently than one would treat non-pecuniary
damage to the body.96 Much the same analysis is applied in assessing the damages in cases of
violations of other fundamental freedoms protected under the Charter.
b)
Solatium doloris
There is no precise scientific method to assess the damages for the loss of moral support. In
Gosset,97 the Supreme Court set out some of the criteria to be considered in order to ensure
adequate compensation. These included the manner of the death, the age of the victim and the
nature of the relationship between the deceased and the family member. It should also be pointed
out that the court has traditionally expressed reticence with setting a limit to the amount of
damages that can be awarded in these situations.98
90
91
92
93
94
95
96
97
98
Delfosse c. Paquette [1997] R.R.A. 573 (S.C.) (Motion to appeal rejected.) The court awarded $75 000 due to the
gravity of the damage to reputation and $25 000 in punitive damages.
Charter, Section 49.
Desrosiers c. Nelson [1997] R.R.A. 477 (S.C.) In this case, the defendant repeated in his defence all of the
allegations which had been struck out following a motion in quo warranto. These allegations included all of the
malicious statements which had been the source of the action in defamation.
Institut national des arts appliqués (I.N.A.A.) inc. c. Grégoire, J.E. 97-763 (S.C.)
Hill v. Church of Scientology of Toronto 126 D.L.R. (4th) 1 (S.C.C.) [Hill]
Hill, p. 177.
Augustus c. Gosset, [1996] 3 R.C.S. 268 (S.C.C.)[Gosset]
- 18 c)
How Are Moral Damages Evaluated?
i)
Non-pecuniary damages for bodily injury
The rationale behind the award of non-pecuniary damages for bodily injury differs in the
Common and the Civil Law.99 Under the Common Law the amount of money awarded in
damages under this head is meant to provide the victim with financial comfort for their loss.
As summarised by Cooper-Stephenson “under the functional thesis the goal is never to value
either an asset or the amount of lost happiness but rather that sum which under the circumstances
will provide a reasonable measure of consolation to the victim…whether as a result of pain or
suffering, loss of amenities, loss of expectation of life…”100 So under the Common Law, the
moral damages would only be awarded if the person who had suffered the damage was aware of
it. Thus, a victim in a coma would not receive compensatory payment for their non-pecuniary
loss, because the idea is that they would not be able to enjoy it.
Under the Civil Law, non-pecuniary damages are awarded as compensation for the loss, even if
the loss is not of a patrimonial nature.101 The fact that the injury the courts are awarding damages
for is not a monetary loss is not seen as preventing the court from protecting or repairing the
infringement that has occurred. In the Civil Law, moral damage is seen as an objective loss that
must be compensated, whether or not the victim is even aware of their loss or is unable to use the
money awarded.102 As articulated in Ferdinand “the victims condition of capacity to perceive
are, therefore, irrelevant to the right to compensation for the moral prejudice.”103 The Supreme
Court decision in Ferdinand helped eliminate this difference between the common and Civil
Law by finding that in Québec, the functional approach should not be used to determine the right
to compensation for moral damage, but rather in respect of calculating the amount of moral
damages.104 he court recognised that the functional approach—or the purely subjective
conception of moral damages is inconsistent with Civil Law. However, the judge found that the
functional approach along with the conceptual and personal approaches in order to calculate nonpecuniary damages in the Civil Law. The reason for this was that the damages must be evaluated
in a personalised manner, requiring the incorporation of all three approaches in order to provide
an accurate amount to award.
ii)
Moral damages in association with property damage
Under the Common Law, it is also recognized that compensation can be provided for nonpecuniary damages as a result of tortious damage caused to property. Even if there is no resulting
99
Blais Inc., 1998) paras 362-363.
100
Cooper-Stephenson, Ken Personal Injury Damages in Canada, (Toronto: Carswell, 1996.) at 495.
101
102
I.e if the victim is in a coma. Baudouin, Jean Louis et Patrice Deslauriers, La responsabilité civile 5e edition
(Cowansville: Les Éditions Yvon Blais Inc., 1998) para 363.
103
Ferdinand, para 71
104
Ferdinand, para 81.
- 19 diminution in the value of the land, the fact that the owner has somehow been deprived of
enjoyment of the land is enough of a reason to award damages for the interference in the owner’s
enjoyment of the land.105 In fact, it has generally been asserted that, under the Common Law,
while it is hard to set out general principles regarding the award of non-pecuniary damages in the
context of torts, in the context of trespass,106 the “plaintiffs whose cases are founded on trespass
tend to have been more successful than plaintiffs in negligence or contract cases.”107
iii)
Other kinds of moral damages
In the context of torts, the Common Law recognizes the award of damages for non-pecuniary
damage in the context of contractual matters.108 However, the Common Law courts are more
reluctant to award non-pecuniary damages in the context of torts unless there has been physical
injury or damage to property. As under the Civil Law, the heads of non-pecuniary damages
including pain and suffering, and psychological pain are all compensated for in relation to
physical injury. Whether the cause of the bodily injury is negligence or an intentional tort, the
courts recognize compensation for the physical injury caused. However, outside of the context
of torts causing bodily harm, the Common Law does not or rarely recognizes non-pecuniary
damages as a head of damages.109
There has been a slow change however, where the courts have recognized causes of action which
seek compensation for purely non-pecuniary injury.110 These include cases of nervous shock or
mental suffering as distinct causes of action. However, there is some reticence on the part of the
Common Law courts to enlarge this category in order to avoid the occurrence of frivolous causes
of action. The example of damages for psychological harm, the courts require that “the
psychological harm manifest itself in physical symptoms or a recognizable psychiatric
illness.”111 Many have criticized such a narrow interpretation of moral or non-pecuniary
damages.112
In the context of defamation, the liability for slander can only be attributed where there is
evidence of special damage. Special damage means actual financial or material loss, and as such
is different from the Civil Law, where recognition of damage to the reputation does not depend
on whether it has pecuniary repercussions is unnecessary.113
105
See Jacques Saelman 20 R.P.R. (4th) 118 (Ontario Superior Court of Justice),
Harris Scientific Products Ltd. v. Araujo [2005] A.W.L.D. 3594 (Alberta Court of Queen’s Bench).
107
Mason v. Westside Cemeteries Ltd. 135 D.L.R. (4th) 361 (Ontario Court General Division) p. 375.
108
Waddams, S.M. The Law of Damages Looseleaf Volume (Aurora : Canada Law Book, 1991-) at 3.1310-3.1450.
109
Cassels, Jamie The law of Damages (Toronto : Irwin Law, 2000) p. 197-198.
110
Waddams, S.M. The Law of Damages Looseleaf Volume (Aurora : Canada Law Book, 1991-) at 3.1250.
111
Cassels, Jamie The law of Damages (Toronto : Irwin Law, 2000) p. 198.
112
Cassels, Jamie The law of Damages (Toronto : Irwin Law, 2000) p. 198.
113
Waddams, S.M. The Law of Damages Looseleaf Volume (Aurora : Canada Law Book, 1991-) at 4.10.
106
- 20 E-
Punitive Damages:
1)
When are punitive damages awarded?
Punitive damages or exemplary damages are awarded for reasons that are very different than
compensatory damages. Their purpose is not to repair the victim’s prejudice but rather to
dissuade a faulty person from repeating the behaviour. Furthermore, it is felt that punitive
damages can dissuade other potential tortfeasers from acting in the same way.114
In the present state of Québec Civil Law, punitive damages are the exception rather than the rule
and they may only be granted when specific legislation provides for their award.115 At present
time, the two main sources of punitive damages are the Consumer Protection Act116 (“C.P.A.”)
and the Québec Charter of Rights and Liberties.117
Section 272 of the CPA sets out that a plaintiff may claim punitive damages in addition to
compensatory damages in cases where a merchant fails to fulfill an obligation set out in the
Act.118 The legislator allows punitive damages in the context of consumer contracts in order to
prevent the recurrence of certain behaviour on the part of merchants.119 This being said, despite
the clear permission to award punitive damages, Courts have been somewhat reticent to accept
the legislator’s invitation. When the punitive damages have been awarded, the Court has justified
its conclusion by finding bad faith or gross negligence.120
114
115
116
117
118
119
120
Sécurata Publique vs. Syndicat national des employés de l’Hôtel St-Ferdinand [1996] 3 R.S.C. 211; Béliveau-StJacques vs. Fédération des employés et employées de services publics inc. [1996] 2 R.S.C. 345. See Thérèse
Rousseau-Houle, Les dommages-intérêts exemplaires pour violation du contrat : « La situation en droit
québécois » (1985) 11 Canadian Business Law Journal 291, p. 302.
Collège Mont St-Louis vs. Brault [1988] R.J.Q. 2048, REJB 1998-07014 (S.C.); Cusalic vs. Zurich compagnie
d’assurance, BE 2000 BE-298 (C.A.) modifying [1995] R.R.A. 1030 (S.C.); Dubé vs. Dubé, J.E. 2003-1100,
REJB 2003-40874 (S.C.).
R.S.Q., c. P-40. [CPA].
Charter.
Section 272 : “If the merchant or the manufacturer fails to fulfil an obligation imposed on him by this Act, by the
regulations or by a voluntary undertaking made under section 314 or whose application has been extended by an
order under section 315.1, the consumer may demand, as the case may be, subject to the other recourses provided
by this Act,
(a) the specific performance of the obligation;
(b) the authorization to execute it at the merchant's or manufacturer's expense;
(c) that his obligations be reduced;
(d) that the contract be rescinded;
(e) that the contract be set aside; or
(f) that the contract be annulled,
without prejudice to his claim in damages, in all cases. He may also claim punitive damages.
S.Q. 1978, c. 9, s. 272; S.Q. 1992, c. 58, s. 1; S.Q. 1999, c. 40, s. 234.
- 21 Section 49 of the Charter also allows awards punitive damages in cases of intentional violation
of human rights.121 Here, the legislator wanted to punish intentional violation of human rights.
The courts have awarded punitive damages in many situations involving the infringement of
rights under the Charter, including defamation, the right to life, humiliation, harassment and so
on.122 Punitive damages will be awarded in the context of article 49 if the plaintiff can show
unlawful and intentional interference with Charter rights.123
Despite their punitive nature, the Supreme Court of Canada appears to have decided that punitive
damages are an accessory to compensatory damages and can only be attributed when
compensatory damages are also attributed.124
2)
How are punitive damages evaluated?
Article 1621 of the Q.C.C. places limitations on the calculation of punitive damages.
Firstly, where punitive damages are awarded, the amount of such damages may not exceed what
is sufficient to fulfill their preventive purpose.
Secondly, punitive damages must be assessed in light of all the appropriate circumstances,
including: the gravity of the debtor’s default, his patrimonial situation, the extent of the
reparation for which he is already liable to the creditor and the fact that the payment of the
damages may be wholly or partly assumed by a third person.125
3)
The main distinction between the award of punitive damages under the Civil Law and the
Common Law is that under Civil Law punitive damages may only be considered when
specifically set out in applicable legislation. Under the Common Law, the court has discretion to
award punitive damages where it finds that the award of compensatory damages will not serve as
a sufficient deterrence and that the defendant’s actions must be further punished.126
With this distinction between the two, it must be pointed out that under the Common Law,
punitive damages is still rarely awarded, as the primary purpose of tort liability remains the same
as that of the Civil Law i.e.: to compensate the victim. In the Common Law there is recognition
that punitive damages are intended to be used by the court to show their repulsion and to punish
121
122
123
124
125
126
Charter.
Béliveau-St-Jacques vs. Fédération des employés et employées de services publics inc. [1996] 2 R.S.C. 345,
p. 409.
Cassels, Jamie, Remedies: The law of Damages (Toronto: Irwin Law Inc., 2000) p. 257.
- 22 for activity that is exceedingly negligent or of excessive bad faith.127 They are meant to have a
deterrent effect and to punish behaviour that the courts find abhorrent.
II - THE CONTRACTUAL REGIME
A-
Introduction
As is the case with a delictual breach of an obligation, there can be a contractual breach anytime
an obligation is not performed in full, properly, or on time.128 Where the debtor fails, without
justification, to perform his obligation after having been put in default to do so, the creditor can
seek remedies from the Court, which may include: 1) specific performance, 2) resolution or
resiliation of the contract, or a reduction of the creditor’s correlative obligation, or 3)
performance by equivalence (i.e.: damages).129
In general, it is the victim of the breach that has the discretionary choice of which remedy to opt
for130. In some cases a party can even seek more than one remedy as long as they are not
incompatible. A party can, for example, claim damages and ask for a reduction of his obligations
or an annulment of the contract. A party could even seek incompatible sanctions as long as the
requests are subsidiary. One could claim, for example, the annulment of a sale and, subsidiarily,
a reduction of the price.
A person that files a claim has the burden of proving the facts that sustain his claim.131
Therefore, it is up to the creditor to prove that the debtor’s obligation has not been respected.
This burden of proof may be discharged by the use of legal presumptions.
B-
Default
As is the case for extra-contractual remedies, before seeking execution, a creditor must inform
the debtor of their default.132 The previous comments made on the requirements of the default
notice apply equally to contractual and delictual breaches. Furthermore, a debtor can be in
default by the terms of the contract itself
For example, in a contract of sale, a preliminary notice of defect is a prerequisite for the
institution of an action against the debtor. Failure to give such notice can lead to the dismissal of
the claim.133 In addition, when the obligation relates to the payment of a sum of money, the
127
128
129
130
131
132
133
Section 1590 Q.C.C.
Section 1590 Q.C.C.
9071-9048 Québec inc. vs. Gatineau (Ville de), 2006 IIJCan 7274 (C.Q.); see also Lebeau vs. 9077-4803 Québec
Inc., 2005 IIJCan 33939 (C.Q.).
Section 2803 Q.C.C.
Section 1590 Q.C.C.
Caron vs. Centre Routhier Inc. [1990] R.J.Q. 75 (C.A.); Quintas vs. Gravel [1993] R.D.I. 175; Syndicat des
copropriétaires du 666, rue Bord-de-L’eau Ouest à Longueuil vs. A. April Construction Ltée, J.E. 2000-1960
(S.C.).
- 23 notice of default serves as the starting point for the calculation of the accumulation of interest in
the event that the debtor of the obligation fails to respect it within the appropriate delay.134
C-
Specific Performance
1)
General Principles
Specific performance is a remedy open to a creditor of a contractual obligation when a debtor is
in default of performing his obligation. Even more than occurs in the case of an extra-contractual
breach, a Court can, by injunction or safeguard order, force the debtor to perform his
obligation.135
However, specific performance is reserved in cases that admit of it.136 First, specific performance
is not available when it requires a unique and personal intervention from the debtor. This would
occur, for example, when a person is hired to paint a portrait.137 Second, specific performance is
usually refused when the performance of the obligation would be physically impossible or would
create endanger the debtor.
Nonetheless, many contractual obligations can be subject to specific performance. For example,
specific performance is often sought by property owners to oblige a lessee to keep his store
opened during business hours.138 Also, specific performance will be ordered to fulfill the terms
of distribution agreements entered into by contracting parties139.
2)
Differences Between Civil Law and Common Law
As in Civil Law, specific performance will not be requested when the personal intervention of
the debtor is required for the performance of an obligation, which would be contrary to
fundamental rights and liberties.
However, unlike Civil Law, the Common Law views specific performance of an obligation as an
equitable remedy. This remedy was originally set out for contracts of sale of land, and in sales of
unique chattels. This is because in such circumstances, a damage award based on market value of
the good will not always reflect the “true value” of the good140. For example, a disappointed
purchaser cannot buy a piece of land identical to the one subject to the contractual breach141, or
the buyer of a reconditioned ship will not find another chattel of the same, unique value142.
134
Section 1617-1618 Q.C.C.
Code of Civil Procedure of Québec, R.S.Q., c. C-25, s. 751ss; Druker, The Emergence of specific performance is
a major remedy in Québec Law, (1987) 47 Revue du Barreau; Gendreau et al., L’Injonction, (Cowansville :
Éditions Yvon Blais, 1998), at 45-90.
136
Section 1601 Q.C.C.
137
Druker, The Emergence of specific performance is a major remedy in Québec Law, (1987) 47 Revue du Barreau,
at 55-61.
138
Propriété Cité Concordia Ltée vs. Banque Royale du Canada [1983] R.D.J. 524 (C.A.).
139
Varnet Software corporation c. Marcam Corporation, 1994 IIJCan 6096 (C.A.)
140
Swan, Reiter, Contracts : Cases, Notes & Materials, 6th ed. (Canada : Lexis Nexis Canada, 2002), at 145.
141
Soulos vs. Korkontzilas, [1997] 2 S.C.R. 217.
142
Behnke vs. Bede Shipping Co. Ltd., [1927] 1 K.B. 649.
135
- 24 Another justification in Common Law for specific performance is to eliminate the risk of under
compensation.
D-
Resolution or Resiliation of the Contract, or Reduction of Obligations
As mentioned earlier, article 1590 Q.C.C. states that one of the options of a creditor to a
contractual obligation is to ask for the resolution or resiliation of the contract, or a reduction of
his correlative obligation.
1)
Resolution
Resolution differs from an action in nullity, which is aimed at repairing the failure of a party to
respect a condition precedent to the formation of a contract. However, the effect of both
recourses is the same. Both entail the retroactive annulment of a contract. The contract is deemed
to have never existed and each party must restore the prestations received to the other.143
2)
Resiliation
Resolution should not be confused with resiliation of the contract, which is defined as the
termination of the contract for the future only.144 Resiliation is the appropriate recourse in the
case of a contract of successive performance where the reinstatement of the parties’ contributions
is impossible.145
A party is not entitled to resolution or resiliation of the contract if the default of the debtor is of
minor importance.146
The contract may be resolved or resiliated without judicial proceedings where the debtor is in
default by operation of law or where he has failed to perform his obligations within the time
allotted in the notice of default.147 According to Baudouin, extrajudicial resolution has become
the general rule.148 However, in certain cases, a judicial proceeding is required; for example,
when a party wants to execute an obligation to obtain reimbursement of the price that it paid a
judgment is required.
In the case of sales of movables, section 1736 Q.C.C. confirms that a buyer can consider a sale to
be resolved if the seller is in default of executing the obligation or for failure to execute the
obligation within the delay set out in the notice of default. Similarly, the seller could consider the
sale resolved if the buyer is in default of paying the sale price and of taking delivery of the
property.149
143
144
145
146
147
148
149
Section 1606 Q.C.C.
Section 1606(2) Q.C.C.
Section 1604 Q.C.C.
Section 1604(2) Q.C.C.
Section 1605 Q.C.C.
Section 1740 Q.C.C.
- 25 3)
Reduction or Suspension of Correlative Obligations
In most contracts, referred to in the Q.C.C. as synallagmatic or bilateral, the obligations of one
party are correlative to the obligations of the other.150 The law allows the creditor of an
obligation to reduce or suspend his own obligation to correspond to the other party’s correlative
non-performance.
a)
Reduction of Obligations
As previously mentioned, when the contractual breach is of minor importance, the creditor
cannot obtain a contractual resolution and must be satisfied with a reduction of his obligation or
seek damages. According to some authors, this remedy would be available even when the breach
is important enough to allow full resolution.151 It is to be noted that the sanction of reduction of
price has been often applied in the context of sales contracts.152
Section 1604 Q.C.C. mentions that all the relevant circumstances must be taken into
consideration in assessing the proportional reduction of the correlative obligation. If the
obligation cannot be reduced, the creditor is only entitled to damages153.
b)
Suspension of Obligations
The suspension of obligations, often referred to as the exception for non-performance or, under
its Latin name, exceptio non adimpleti contractus, allows a party to a synallagmatic contract in
which obligations have become exigible to refuse to perform their correlative obligation (to a
certain degree) if the other party failed to perform their obligation to a substantial degree.154
However, this measure cannot be used if the party wishing to avail himself of the exception for
non-performance is bound by law, by the will of the parties, or by usage to perform first. It must
be noted that even if the parties can waive the application of this right, the waiver would be
subject to the control of abusive clauses set out for contracts of adhesion and consumer
contracts.155
Some specific applications of the exception for non-performance exist in the Q.C.C., notably
concerning sales contracts, exchanges, and leases.156 In practice, this defence mechanism,
protecting a party to a contract dealing with a defaulting party to the same contract, can also be
used as a pressure mechanism for all parties to honour their obligations. This exception also
establishes a certain protection against the possible bankruptcy of a co-contractant.
150
151
152
153
154
155
156
Section 1380 Q.C.C.
Baudoin & Jobin, Les Obligations, 6th ed., (Cowansville : Éditions Yvon Blais, 2005), at 809; N. Vézina & L.
Langevin, Des Obligations dans Obligations et Contrats, (Cowansville : Éditions Yvon Blais, 1997), at 84.
Banque d’Épargne de la Cité et du District de Montréal vs. Messier [1996] R.D.I. 314 (C.A.); Industries
Georges Deschênes Ltée vs. Robichaud, J.E. 97-377 (C.A.); St-Gelais vs. Desfossés, J.E. 97-1249 (C.A.); Meany
vs. Coulombe, J.E. 97-630 (C.A.).
Section. 1604(3) Q.C.C.
See Andréa Pinnea, L’Exception pour risque d’une exécution, (2003) RTD. Civ. 31.
Section 1437 Q.C.C.; See 9057-9541 Québec Inc. vs. Rousselle [2003] R.D.I. 441.
Section 1721, 1740(2), 1796, 1914, 1915 Q.C.C.
- 26 Certain conditions govern the exception of non-performance. First, the exception for nonperformance is available when the execution of obligations is simultaneous. For example, if a
seller has granted the buyer a term payment, he cannot withhold delivery simply because the
payment has not been made. Second, there must also be a faulty non-performance. Consequently,
even though a force majeure (superior force) may result in the non-performance of an obligation,
such a nonperformance will not give rise to the application of the exception of non-performance.
Finally, the application of the exception is also subject to the general rule of good faith.
Therefore, if a party has provoked the default, that same party may not invoke the exception of
non-performance.157
E-
Performance by Equivalent: Damages
1)
Material and Bodily damages
In most cases, the nonperformance of a contractual obligation will lead to a claim for damages.
The fundamental principles that govern civil extra-contractual liability and contractual civil
liability are theoretically the same. Damages must be an immediate and direct consequence of
the debtor’s fault as well as being certain and ascertainable.
However, in contractual matters, the debtor is only liable for damages that were foreseen or
foreseeable at the time the obligation was contracted.158 This condition is a consequence of the
presumed will of the parties. Foreseeability must therefore be appreciated on the day where the
contract was concluded. It must also be assessed through an evaluation of what a reasonable,
prudent and diligent co-contractor would have foreseen in similar circumstances. However, when
the non-performance is due to the intentional or gross fault of the debtor, the debtor will assume
all direct damages, including those that were unforeseen.
In addition, the evaluation of contractual damages is done in the same way as the evaluation of
extra-contractual damages.
a)
Similarly to the Civil Law regime laid out above, Common Law also normally awards damages
in favour of the party injured by the breach. The ruling principle is to place the complaining
party in the same positions he would have been in if the contract had been performed159. As in
Civil Law, the object is not to punish the faulty party but to compensate the party who suffers
from the contractual breach160. Further, the assessment of the amount of compensation to be
awarded to the complaining party of a contractual breach is not always an easy task and varies
according to different factual situations. For example, the assessment of damages for a retailer
who has purchased goods from a manufacturer facing a buyer who has refused to accept delivery
157
Section 1375 Q.C.C.
Section 1607, 1611, 1613 Q.C.C; Vaillancourt vs Cie d’Assurance Missisquoi [2002] R.R.A. 374.
159
Wertheim vs. Chicoutimi Pulp Co., [1911] A.C. 301, at 307.
160
Ruxley Electronics and Construcion Ltd. vs. Forsyth [1996] 1 A.C. 344.
158
- 27 of the goods purchased161 will be more complicated then the assessment of damages for nonperformance of a contractual undertaking such as providing a certain quality of goods.
Further, damages must have a direct link to the nonperformance of an obligation; they are not
unlimited. Such as is the case in Civil Law, damages must be reasonably foreseeable, and direct.
In the Common Law dialect, courts will sometimes say that the damages must arise naturally,
according to the usual course of things, from the breach of the contract itself162, and be remote to
the said breach163. In addition, damages must be certain in order to be recoverable164.
2)
Moral Damages
Unlike bodily and material damages, which are easy to evaluate under the principle of
compensation of the loss incurred or gain deprived due to the contractual breach, moral damages
are more abstract. In Civil Law, moral damages, such as lost enjoyment and non-economic
interests, may be granted for a contractual breach. This is explicit in the terms of section 1458
Q.C.C.
a)
Comparatively, moral damages have also long been recognized under the Common Law
regime165, however occasionally criticized for potentially “opening the floodgates” of interests
that may be indemnified. Traditionally ignored as potential contractual damages, such damages
are now widely granted. Further, the Supreme Court of Canada has recently granted moral
damages, in Fidler vs. Sun Life Assurance Co. of Canada166, for a contractual breach. In this
case, the Court established that the degree of mental suffering must be sufficient to warrant
compensation. In addition, the traditional criterion that the damage suffered must be foreseeable
at the time the parties concluded their agreement was applied; for example, it is appropriate to
hold that mental distress flowing from the failure to pay required benefits was within reasonable
contemplation of the parties at the time the disability insurance contract was concluded.
3)
Penal Clauses
a)
Pre-determined Damages
The parties have the possibility of determining, in advance, what the damages will be in case of a
subsequent breach of contract. The insertion into a contract of such clauses avoids the
assessment of damages at the court’s discretion. Furthermore, this type of clause frees the
creditor of the burden of proving the value of the loss incurred and gives him the right to the
amount stated in the clause.
161
Victory Motors Ltd. vs. Bayda [1973] 3 W.W.R. 747 (Sask. D.C.).
Hadley vs. Baxendale [1854] 156 E.R. 124 (Court of Exchequer).
163
Koufos vs. C. Czarnikow Ltd. [1969] 1 A.C. 350.
164
Courtney and Fairburn Ltd. vs. Tolaini Brothers (Hotel) Ltd., [1975] 1 All E.R. 716.
165
Jarvis vs. Swan’s Tours Ltd. [1973] Q.B. 233.
166
[2006] SCC 30
162
- 28 Penal clauses can appear in different types of contracts, and can establish the payment of a lump
sum or of a penalty calculated for each day of delay. However, the use of penal clauses is subject
to the general rules governing compensation including the obligation to serve a notice of default.
In addition, as in other obligations, the quantum of the penal clause must be easily determined
and determinable. The determination of the penalty must not be left to the discretion of one party
or the other. In case of ambiguity, the interpretation that is most favourable to the debtor of the
obligation will be retained.167
This being said, the creditor of the obligation is not forced to avail himself of the penal clause
and could prefer to opt for the specific performance of the obligation. While generally valid,
numerous legislative dispositions have nuanced the application of penal clauses. For example,
section 2332 Q.C.C. allows the court to invalidate penal clauses that render a contract for a
simple loan excessive. The C.P.A. also contains a series of sections against the imposition of
such penalties.168
b)
A similar rule applies in Common Law jurisdictions. Courts have distinguished between clauses
that require payment of an amount that is excessive in comparison to actual damages, which are
characterized as “penal” and are unenforceable, and clauses that require payment of a sum in the
event of default, which is viewed as a fair pre-estimate of damages, which are characterized as
“liquidated damage clauses” and are enforceable169. Therefore, as in Civil Law, the courts
control the application and the content of these clauses; when they appear to be unreasonable or
included in a contract as the result of unfair bargaining power, they will not be enforced170.
4)
Moratory Damages
Another type of damage, referred to as moratory damages, compensates the creditor for the
prejudice suffered due to the delay in execution. These damages require that the debtor be put in
default and are due only as of that date of the notice of default. When the obligation is to pay a
sum of money, the moratory damages are constituted by the interests on the amount at the rate
set by law or agreed upon by the parties.171
CONCLUSION
It is often said that a right without remedy is no right at all. As we have seen the Quebec Civil
Law grants specific remedies to victims that have suffered a loss as a result of delictual or
contractual breach.
167
Section 1432 Q.C.C.
See also Bankruptcy Act, R.S.C. 1985 c. B-3; Section 758 Q.C.C. (in the case of successions); Section 1901
Q.C.C. (in the case of a lease).
169
Swan, Reiter, Contracts : Cases, Notes & Materials, 6th ed. (Canada : Lexis Nexis Canada, 2002), at 855.
170
Dunlop Tyre Co. vs. New Garage and Motor Co., [1915] A.C. 79.
171
Section 1617 Q.C.C.
168
- 29 In most cases, the existence and evaluation of the damages is very similar to what is awarded
under the common law regime.

REMEDIES FOR DELICTUAL AND

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