The following excerpt is from Fidler v. Sun Life Assurance Co. of Canada, [2006] 2 SCR 3, 2006 SCC 30 (CanLII):
55 The recognition that Hadley v. Baxendale is the single and controlling test for compensatory damages in cases of breach of contract therefore refutes any argument that an “independent actionable wrong” is a prerequisite for the recovery of mental distress damages. Where losses arise from the breach of contract itself, damages will be determined according to what was in the reasonable contemplation of the parties at the time of contract formation. An independent cause of action will only need to be proved where damages are of a different sort entirely: where they are being sought on the basis of aggravating circumstances that extend beyond what the parties expected when they concluded the contract.
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