Honours
SCC ramps up mitigation duty
■ Donna Walwyn, a partner at
Baker & McKenzie, has been
selected for the 2012 fellows Program of the leadership council
on legal Diversity, a u.s. organization made up of top general counsels and managing partners. wal-wyn, who heads B&M’s pension
and employee benefits practice in
Toronto, is the first canadian participant in the history of the lclD
fellows Program, a structured
mentoring program designed to
identify high-potential lawyers
from diverse backgrounds.
Plaintiff’s lawyer calls top court ruling ‘pretty devastating’
CRISTIN SCHMITZ
OTTAWA
Moves
■ Andrea Laing has joined the
Toronto office of business law
firm Blake, Cassels & Graydon as
a partner in the litigation & dis-
pute resolution group. formerly
with osler, hoskin & harcourt,
laing focuses on securities and
corporate/commercial litigation.
■ Frank DeLuca has joined Cas-
sels Brock & Blackwell as a part-
ner in the securities group. for-
merly of Mccarthy Tétrault,
Deluca practises in mergers and
acquisitions, corporate finance,
corporate governance and con-
tinuous disclosure.
■ Lyle Teichman has joined the
Toronto office of Stikeman
Elliott as senior counsel in its
employment, labour and pen-
sion group. formerly with Tow-
ers watson, Teichman’s practice
has focused on pension and
employee benefits law, execu-
tive compensation and pensions
and supplemental employee
retirement plans, and cross-bor-
der compensation issues.
The Supreme Court has ramped
up the obligation of innocent victims of contract breaches to mitigate their damages while they
are seeking specific performance.
In a decision that could deter
specific performance claims,
especially in cases of soured real
estate deals, the top court split
6-1 to affirm an Ontario appellate decision that slashed to one
dollar the $1.9 million lost-profit damages that a Toronto
real estate developer won at
trial in 2009, after the defendant seller of some land breached
its contract and refused to close
the deal.
The Supreme Court’s majority
ruled on Oct. 17 that appellant
Southcott Estates Inc. was
required to mitigate its losses by
trying to buy a substitute property to develop, even though the
company wanted to compel the
seller to convey the land and
moved quickly to ask the court
for specific performance.
In Southcott Estates Inc. v.
Toronto Catholic District School
Board [2012] S.C.J. No. 51, Justice Andromache Karakatsanis
affirmed that because the plaintiff
failed to mitigate, it was entitled
to only nominal damages.
The court’s “pretty devastating”
judgment “raises the obligation
to mitigate to a higher level than
was previously considered,” said
Southcott’s counsel Milton Davis,
of Toronto’s Davis Moldaver.
“One principle that comes out
of this is, if you sue for specific
performance and don’t try to
mitigate, you run a risk of one
of two things: either you’ll be
found not to have properly
mitigated, or you may end up
with two properties,” Davis
Robinson
Bell
Mergers
■ Fasken Martineau DuMoulin has
announced a merger with Johannesburg, south africa-based Bell
Dewar. Bell Dewar managing partner Blaize Vance will be regional
managing partner for fasken.
said. “The implications of that
is it will make parties consid-
ering specific performance
more careful because if it turns
out that they’re wrong [in their
specific performance claim],
even if they’re reasonable [in
making the claim], they may
not succeed [in obtaining dam-
ages] because they will have
failed to mitigate.”
Derek Bell of Toronto’s Bennett
Jones noted one potential way of
avoiding the consequences of
Southcott, as it relates to real
property, is to speedily seek a cer-
tificate of pending litigation.
“If the court decides, at that
early stage, that the property is
not unique, it will not issue a lis
pendens and presumably, at
that point, the plaintiff would
know that it has to mitigate its
losses by purchasing replacement property,” Bell said. “And
if the court decides that the
property is unique at that early
stage, then that should go a
long way, if not the entire way
in establishing” that the plaintiff has a substantial and legitimate interest in pursuing
specific performance.
The defendant’s counsel, Sandy
Robinson of Toronto’s Miller
Thomson, said the court has
provided guidance on how a
company that is a separate entity,
but related to a larger group of
companies, ought to mitigate
damages in the case of a breach
of contract.
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