What is the test for calculating damages for wrongful termination of a lease agreement?

British Columbia, Canada


The following excerpt is from Sunshine Vacation Villas Ltd. v. Govenor & Co. of Adventures of England Trading Into Hudson's Bay, 1984 CanLII 336 (BC CA):

The trial judge also relied upon Haack v. Martin, 1927 CanLII 57 (SCC), [1927] S.C.R. 413, [1927] 3 D.L.R. 19, a case of wrongful termination of the lease of a farm and, in particular, the following passage in the judgment of Rinfret J. at p. 417: When the respondent and the appellants in this case got together on the 26th day of February, 1924, and made the agreement whereby the respondent leased his lands and the appellants promised to pay the yearly rental of one-third of the crop, no doubt the crop each party anticipated was the average crop grown on these lands during the previous years: and the value to each of them of such average crop may reasonably be considered as representing the damages within the contemplation of the parties, if for some reason they happened to be deprived of their share or portion of the yearly rental. Such therefore, in this case, is the measure whereby the damages must be computed, in addition to any actual loss or expense that may be established. (The italics are mine.)

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