The Latest Word From The SCC On Assessment Of Contractual Damages

The recent Supreme Court decision in IBM Canada Limited v Waterman, 2013 SCC 70, has gotten much attention for its ruling and comments about the "collateral benefits" principle and how it applies to pension benefits paid to wrongfully dismissed employees during the notice period. The issue was whether the exception should apply to preclude a reduction, in the amount of the pension benefits, to the compensatory damages payable to the employee for the wrongfull dismissal. The application of the "collateral benefits" principle was the central point of disagreement between the majority judgment of Cromwell J. and the dissenting judgment of Rothstein J. and McLachlin C.J. The former found it applied in this case while the latter found it did not, mostly due to the specific nature of the pension plan at issue.