Legal Blog

Prove Damages

A party who wants damages has the burden of proving them. What proof is necessary? Better yet, what happens when there is almost no proof? This question was answered in 9071-5392 Quebec Inc. v. Katsoulis, a 2007 decision of the Ontario Superior Court of Justice.

Contract

An owner contracted with a general to construct an addition to, and renovate the interior of, its existing restaurant. The contract consisted of a quote that described the work and set out a price of $489,000. There was no formal contract, the work progressed, the owner made changes without agreeing with the general on a price for them, and the owner paid the general in cash. It was a recipe for disaster.

The obvious occurred. The general walked, claiming that the owner owed it $75,000 for unpaid work it completed; the owner claimed that there were deficiencies and incomplete work that cost it an additional $175,000 to complete; and the owner alleged that the general delayed the project costing the owner $140,000 in lost profits.

General’s Damages 

The general produced almost nothing to prove the value of the work that it had completed. It did not introduce as evidence any written invoices, receipts, time records, or copies of cheques. Neither party tendered evidence of a contractor, engineer, or other expert regarding the value of the work that the general had completed, the value of the extra work, the cost to complete the work, or the lost profits of the restaurant. The general only produced an estimate of the additional work.

The judge held that the general did not provide anything to demonstrate the total value of its work and, therefore, the trial judge could not calculate what the owner owed, if anything, on the contract. The trial judge dismissed the general’s claim.

Owner’s Damages 

Similarly, the owner produced nothing: no invoices of additional payments to complete the work, no cheques, nothing. The only testimony came from an architect who gave evidence as to the quality of the work and then estimated that the remedial work would cost $175,000 to $195,000. The trial judge gave no weight to the testimony regarding cost. It was but an estimate and the real evidence had to deal with what it actually cost. However, there was no real evidence. Similarly, the owner produced no records of the restaurant business to show what the lost profits were, even assuming that the general delayed the construction. The trial judge dismissed the counterclaim in full.

The trial wasted five days of court time. In essence, the trial judge stated, in a nice way, a pox on both your houses.