Calculating Damages For False Estoppel

The Quebec Court of Appeal in Meyerco Enterpresis Ltd. v. Kinmont Canada Inc. (2016 QCCA 89) has recently partially overturned a lower court ruling that awarded damages for a false estoppel signed by a tenant based on application of a cap rate paid by the buyer and addressee of the estoppel instead applying general principals of damages including mitigation.

Notwithstanding statements in the tenant estoppel that confirmed payment of rent without offset or compensation, the tenant was in fact paying its rent by offsetting services provided to a landlord affiliate. The tenant defaulted almost immediately after the sale.

The buyer sought redress by way of a reduction of purchase price (as opposed to cancellation of the transaction).