In Smith v. Landstar Properties Inc., 2011 BCCA 44 the plaintiff loaned the defendant $100K.  She was promised a return of 8% and that her investment would be secured against certain properties.  The defendant did not, in fact, secure the loan, so it was unsecured.  The defendant paid the money back and paid the interest.  The plaintiff sued the defendant in contract and tort (misrepresentation) for additional interest, arguing that the interest rate on an unsecured loan would have been significantly higher (over 24%).  The defendant argued that the plaintiff had not suffered any loss: from a financial perspective she got what she was promised.

The trial court awarded the plaintiff additional interest, based on the spread between the unsecured interest rate and the 8% actually paid.  The British Columbia Court of Appeal affirmed, but on somewhat different reasoning.

My sense, on only a preliminary assessment, is that the case provides some interesting damage calculation issues.  Is the answer right?  Is the reasoning right, in contract or tort?  The main case relied on is Experience Hendrix LLC v. PPX Enterprises Inc., [2003] EWCA Civ 323.

The case is at http://www.canlii.org/en/bc/bcca/doc/2011/2011bcca44/2011bcca44.html

Stephen

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Dr. Stephen G.A. Pitel
Associate Professor 
Goodmans LLP Faculty Fellow in Legal Ethics 2010-11
Faculty of Law, The University of Western Ontario