Tuesday, June 21, 2011

Mitigation does not apply to an action for a fixed debt

Fischer v. Dyck Forages &  Grasses Ltd., 2011 MBCA 47  deals with the obligation to mitigate when collecting a contract debt.

In general, mitigation does not apply to an action for a fixed debt as it does to tort and contract damage claims. Doctrines such as remoteness and mitigation, which place limits on the recovery of damages, do not apply to a debt. 

The Court writes:

10               As to the mitigation argument, we agree with the plaintiff that the principle of mitigation has no role to play in this claim given that the plaintiff sued for payment of a contract debt and not for damages for breach of contract.  See Manufacturers Life Insurance Co. et al. v. Granada Investments Ltd. et al. 2001 CanLII 2708 (ON CA), (2001), 150 O.A.C. 253; Wayne Ryan Carpet Sales Ltd. v. Wilson 1993 CanLII 3182 (NS CA), (1993), 120 N.S.R. (2d) 87 (C.A.); and Wilmot v. Keenlyside, [1989] B.C.J. No. 2020 (C.A.) (QL).

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