What are the consequences of a breach of contract where a plaintiff is entitled to a third party's "aggravated damages"?

Ontario, Canada


The following excerpt is from Blake v. Dominion of Canada General Insurance Co., 2013 ONSC 6069 (CanLII):

Case law describes two types of “aggravated damages”. The first arises out of aggravating circumstances, not based on a contract but on a separate cause of action, such as the torts of defamation, oppression or fraud (Fidler v. Sunlife, para. 52).

Mental distress damages are the second form of aggravated damages that arise as a result of a breach of contract, as per the principle of expectation that the court expanded upon. “They exist independent of any aggravating circumstances, and are based completely on the parties’ expectations at the contract formation. With respect to this category of damages, the term “aggravated damages” becomes unnecessary and, indeed a source of possible confusion.” (Fidler v. Sunlife, para. 53).

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