Case information

Contracts — Commercial contract — Breach — Corporation entered into three agreements to purchase contiguous parcels of land from CPR — Two transactions completed but third did not as CPR asserted land for that transaction was not surplus to operational requirements and, therefore, agreement did not require it be sold — CPR sold land instead to Alberta on different terms — Court of Appeal setting aside lower court decision granting judgment against CPR and Alberta and ordering new trial — Whether there is a “normal measure of damages” that overrides Hadley v. Baxendale in land sale context subject only to narrow exceptions — If so, what are those exceptions — Whether “contract as a whole” principle requires court to address contract provisions not argued or referred to at trial — Whether it prevents consideration of liability and damages issues in separate phases of a proceeding.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicant, Remington Development Corporation entered into three agreements to purchase contiguous parcels of land in downtown Calgary from the respondent, Canadian Pacific Railway Company (CPR). Two of the transactions completed. The third did not. CPR asserted the land for that transaction was not surplus to its operational requirements and, therefore, the agreement did not require it to be sold. CPR sold the land instead to the respondent Alberta on different terms.

The trial judge determined CPR breached the terms of its agreement with Remington by not proceeding with the sale of the third parcel of land. She also determined Alberta had induced that breach. Applying a lost profits analysis, she held CPR and Alberta jointly and severally liable to Remington for damages in the amount of $165,166,431 plus interest.

CPR and Alberta appealed that decision. Remington cross-appealed, arguing it should also be entitled to punitive damages. The majority of the Court of Appeal allowed the appeal, dismissed the cross-appeal and ordered a new trial.