What is the common law measure of damages for fraudulent and negligent misrepresentation?

British Columbia, Canada


The following excerpt is from Casillan v. 565204 B.C. Ltd., 2009 BCSC 1335 (CanLII):

The measure of damages at common law for fraudulent and negligent misrepresentation was described in the detailed reasons of Parrett J. in Wiebe v. Gunderson et al., 2003 BCSC 1282, 13 R.P.R. (4th) 78 [Wiebe]. In cases such as this, where a misrepresentation has induced the plaintiff to enter into a contract, the tortious measure of damage is appropriate. The court said at paras. 229-230:

In England and in Canada the authorities have consistently found that the proper approach is to apply the tortious measure of damages. This is an important distinction for this approach awards a measure of damages which places the plaintiff in the position he would have occupied if the statement had not been made rather than in that he would have occupied if the statement was true. This distinction is recognized in McConnel v. Wright, [1903] 1 Ch. 546. It is not an action for breach of contract, and, therefore, no damages in respect of prospective gains which the person contracting was entitled by his contract to expect come in, but it is an action of tort – it is an action for a wrong done whereby the plaintiff was tricked out of certain money in his pocket; and therefore, prima facie, the highest limit of his damages is the whole extent of his loss, and that loss is measured by the money which was in his pocket and is now in the pocket of the company. That is the ultimate, final, highest standard of his loss.

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