Legal and Equitable Remedies- You Won’t Get What You Didn’t Ask For

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A claimant must clearly set out the relief/remedy it’s claiming for the Court. To do so, the claimant must understand the different kinds of legal and equitable remedies available. This lecture provides a basic understanding of the different kinds of legal and equitable remedies.

This lecture is taught by Amer Mushtaq, LL.B., M. Engineering , B.Sc. (Hons.), who is the Principal and Founder of Formative LLP.   Through his YouTube channel, YouCounsel, Amer shares practical advice from his years of legal experience to help anyone access justice and achieve their goals.  Subscribe today to learn more.


Show Notes:


Lecture Slides:

Machine Transcription:

Welcome everyone.  This is Amer Mushtaq from YouCounsel.

When you go to court, that is, when you commence a court action you are asking the court to grant you some sort of relief—either it’s in the form of money or it could be something else.  What are the different kinds of relief that you can ask from the court?  It is important for you to understand some basic concepts so you can include those reliefs appropriately in your statement of claim.  If you don’t ask for relief, the court, generally, is not going to grant you that relief on its own.  In this lecture we will talk about those legal and equitable remedies.  We begin with our usual disclaimer, that this course is not legal advice.  If you have any specific questions regarding your issues you should contact a lawyer or a paralegal or the Law Society of Ontario for a referral.

What is a Remedy? A Remedy is a Relief that you’re asking from the court.  As I mentioned the judge or the court will not award you a remedy if you have not asked for it.  It’s important for you to include that and also that the relief or remedy that you’re asking must be within the power of the court to grant.  This is not the topic we’re covering in this lecture but it is important for you to understand the jurisdiction of the specific court which can grant you the relief.  A common example could be that if you want the defendant / the wrongdoer to pay you, let’s say, $50,000.00 for the breach, you cannot go to small claims court and ask for that relief because small claims court has limited jurisdiction of $25,000.00.  Even if you are successful in your trial at a small claims court you will only get the relief for $25,000.00 because the judge does not even have the power to grant to you more than $25,000.00.  Similarly, if your matter is before the human rights tribunals—the human rights tribunals only has the power to deal with human rights issues—discrimination issues.  If you ask for a breach of contract remedy which is unrelated to a human rights issue from a human rights tribunals, it will not award you that relief or remedy because it does not even have the power to give you that relief.  It is important to understand both (1) what are the kinds of remedies that you can ask from a court / from a judge / from a tribunal; and (2) whether that judge / that court has the power to actually grant you that specific relief.  

There are 2 basic types of remedies: [A] one is called legal remedies; and [B] the 2nd is called equitable remedies.  We will explain what are these remedies and what are the differences between the two.  To understand their distinction we will quickly talk about a brief history of where these remedies originate from.  Few centuries ago what used to happen was that people who had a legal dispute will go to a court of law.  The court of law had set of rules or principles and they will apply those principles in those specific circumstances and will come up with a resolution.  Sometimes the application of strict, legal rules would result in harsh results/harsh resolution of the dispute.  People had no choice but to either accept it or what they will do is go and appeal to the King.  Then the King had the power to look at the fairness of the entire issue and grant certain reliefs on the basis of moral values that the king had or the society had at that time. Some rules were harsh and they will go on appeal to the king and what happened was that a lot of these cases were going to the King.  The King was busy so then assigned this duty to his Chancellor.  Then the Chancellor formed this court called Chancery or Court of Equity.  A lot of these cases will go to the Court of Equity.  This was not a court of law this was a court of equity and it’s not considered a legal resolution of the dispute.  It was based upon certain natural fairness principles (based on the moral values of the society). At that time, in the middle ages, there were courts of common law and courts of equity that were developed—providing different functions.  As I mentioned the court of equity will apply the principles of natural laws / basic fairness principles and then use their discretion in certain circumstances where the rigid application of the law will result in an unfair resolution.  Presently, all of the courts in Canada have the power to apply both law and equity.   There was an Act called the Judicature Act which allowed all courts to exercise the power to grant legal remedies and equitable remedies.  What you want to keep in mind is that the distinction between legal remedies and equitable remedies remains.  It is important for you to understand that there are 2 different kinds of remedies and the court may have the power to grant both remedies.  It is important for you to understand under what circumstances you will ask for legal remedies in your case and under what circumstances equitable relief will be appropriate.

One example that comes to my mind about where the strict application of the law will result in a harsher resolution is: Back in 2009 in the UK a person called John had intended to give his farm to another person, David, when he would pass away. He drafted /created a will in which he bequeathed / he gave his farm to David.  David had worked on this farm for 28 years so there was some understanding between the 2.  John created that will but that Will got destroyed—so the Will didn’t exist.  John passed away.  When John passed away there was no will in existence.  David had an understanding that there would be a Will that will grant him the ownership of the farm but the will was gone. Under the strict application of the law, the rules that will apply is that, that property (that farm) will now be transferred to John’s relatives (blood relatives).  There are specific rules about when someone dies intestate.  Intestate is when someone has no will and he or she passes away—then those rules will come into effect.  In the resolution or the end result of that will be that David would not get his farm.  David would apply to these courts and under these strict common law rules David would not have gotten the farm.  But the court then applied an equitable principle called equitable estoppel—we are not going to talk about that principle today.  Under that equitable remedy the court was able to grant the relief to David so that he could have the farm as a result.  This is one example of where the principles of equity will come in to assist an aggrieved party and provide a resolution which is more fair as opposed to a legal resolution which has unfair results.

Ok, so let’s talk about legal remedies.  The Court’s basic power is to award monetary compensation which is called damages. A simple example could be that if you have a car accident and have an injury or a broken leg or something the court will grant to you certain money as a result of that injury (monetary compensation is the most common way the court grants any relief).  Then there are different kinds of damages.  It is important to understand at least fundamentally that there are different kind of damages—which have different criterion—in order for you to get those damages. What are some of the common types of damages (1) first one is called Compensatory damages: Compensatory damages are called actual damages.  These damages are for an actual loss.  An example could be that you sold your car to someone far $30,000.00.  That person paid you $5000.00 as deposit, took the car away but did not pay you the remaining $25,000.00.  Your actual loss based on that contract (based on that deal) is now $25,000.00.  You go to court and ask for those compensatory damages for your loss of $25,000.00.  That’s the most common type of damages compensatory damages. (2) Then there is another kind called General damages. These are damages for non-monetary loss that arises from that breach of contract.  An example could be human rights damages—where someone claims that he or she has suffered injury to their dignity and feelings of self-worth.  These are non-monetary losses—losses are for pain, suffering and anxiety—all of these damages could be general damages. (3) Punitive damages, as the name implies, are damages which are not compensatory damages.  These damages are essentially to punish the wrongdoer (the defendant) who has done something wrong.  They act as a deterrent to the society so that others should not conduct themselves in the same manner.  Punitive damages is another form of damages. (4) Liquidated damages—it’s a reasonable estimate of the actual loss. Sometimes it will be hard to figure out the exact losses when a breach occurs.  Parties can agree to a reasonable estimate. It has to be a reasonable and fair estimate of the actual loss.  It cannot be exaggerated, cannot be excessive or it may be considered a penalty for the default.  Liquidated damages is another example. A common example is: if you are a contractor who has provided certain services, that the amount of services were agreed upon—let’s say it was a plumbing job.  You had agreed to provide plumbing services for $2000.00.  You provided those services but the other side did not pay for it. You rendered an invoice.  That will be an example of liquidated damages because the value of the actual damages or loss was set and agreed upon. Liquidated damages is another example of damages. (5) Aggravated damages: is for the aggravation of the injury.  If the conduct of the wrongdoer cause aggravation of certain injuries and these could be mental or emotional injuries or other kinds of injuries, then you can get aggravated damages for that. (6) Then there’s consequential damages which are indirect damages or incidental damages.  These are damages that are not arising from the actual breach of the contract but being affected by the wrongdoers conduct. An example from a famous case I believe Hadley vs. Baxendale—in that case a party (a manufacturing facility) required a part from a different location.  Once they had the part they will process certain orders for other clients.  These were orders in a significant amount.  They relied on a courier company to get those parts and deliver those parts in a specific time period. Once they had those parts they will be able to process those orders.  What happened was the courier company failed to deliver those parts in time.  As a result of that failure the aggrieved party then lost significant amount of money because they could not process the orders in time and suffered significant loss. This kind of loss is really the breach is simply that the courier company could not deliver the product in time.  In normal course of action if you pay $200.00 for the courier company to deliver the product and if they fail to do so, then your normal damages will be $200.00 because they failed to complete the contract.  In this situation that failure to complete the contract resulted in a $1,000,000.00 or so of losses and so those losses were incidental or indirect losses.  They are called consequential losses. In certain circumstances not in all circumstances, you can’t go around suing courier companies for all kinds of indirect incidental losses.  There is a specific criteria for you to qualify for these kind of losses.  There could be consequential losses that the court may grant as well. 

Now with respect to Equitable remedies, the most common equitable remedy is called (1) an Injunction. An injunction is essentially requiring a person to do something or stopping the person / prohibiting the person from doing something.  An example could be that a developer is clearing the land for a major development project.  There are some old trees on the property.  They will end up cutting down those trees. You believe that the developer should be stopped from cutting those trees. Then you will bring an injunction in the court and get a court order which is an equitable remedy—which will stop that developer or any other wrongdoer from doing something that they’re doing.  Similarly, if someone is not doing something, then you can bring an injunction to compel that person to do something.  Injunction is an equitable remedy that is available.   (2) Specific performance is another equitable remedy.  In this situation the court can require a person to perform a contract. For example, you purchased a small house in Toronto for $2,000,000.00.  You paid your initial deposit. You are ready and willing to complete the contract but at some point the seller decides not to complete the contract and the seller is denying you that house now.  Ordinarily, this is a breach of contract case and the court will award you damages.  In some limited circumstances the court may actually compel the seller to complete the contract that he or she has agreed upon.  That that requirement, that compelling of someone to complete the contract comes under the category of specific performance.  Again there are specific requirements for you to be able to get a relief of this kind.  It’s not generally available but the relief itself is possible under equitable remedies. (3) Constructive trust is another equitable remedy.  There are many more—constructive trust—could be where someone misappropriated your value of property.  At that time the value of property was less.  Subsequently the value of the property increased or the person who took away or misappropriated the property then sold it off to an innocent 3rd party.  You want to be able to enforce your right against that innocent 3rd party, then you can claim for a constructive trust. Under equitable remedies (4) Rescission.  An example of rescission could be that you entered into a contract which was validly entered.  You want that contract to be completely rescinded. Under the specific circumstances of your case, you can ask the court for that remedy.  (5) Rectification is another remedy in which a court may rectify a specific contract (in certain very limited ways rectify the contract) or rectify a Will in specific circumstances where the court does have power to grant this equitable remedy.   

These are sort of the basic legal and equitable remedies.  These are a few but there are many more.  It is important for you to understand. Why? Because when you commence your court action (when you prepare your statement of claim) you are describing the dispute but you must clearly set out in the statement of claim what is the relief or the remedy that you’re asking.  If it’s a monetary remedy you have to set it out—whether you’re claiming one $100,000.00 or $500,000.00.  You have to set it out in your claim and also what kind of damages.  Is it a compensatory damages claim? Is it a liquidated damages claim? Is it a punitive damages claim? Or multiple of those.  You have to clearly set it out and when you set this out you, need to provide all the necessary facts in your claim that justify the award of the remedy that you’re claiming.  For instance in the case of punitive damages, we know under the legal principles that the court will grant punitive damages only when the conduct of the wrongdoer (the defendant) was high-handed.  If it was a high-handed conduct, you have to provide those facts in your claim that explain or justify that the conduct was indeed high-handed. If the conduct occurred in the normal course of business and the conduct wasn’t high-handed and you claim punitive damages, those damages will not be awarded to you.  Aside from your story about the dispute it is important to clearly outline and specify the kind of claim of the remedies that you’re seeking and you want to make sure that whatever the factual basis is required to get those damages (to get those remedies) those are stated clearly in your statement of claim.  Hopefully, this gives you a sense of the legal and equitable remedies, their distinctions and empowers you to obtain an appropriate relief from the court.

Thank-you for watching and we’ll look forward to seeing you in the next lecture.

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