Executive Summary: Key Legal and Evidentiary Issues

• Appeals by CPR and Alberta were allowed, Remington’s cross-appeal was dismissed, and a new trial was ordered.

• The trial judge erred by not reading the contract as a whole, driving the need for a retrial.

• The implied-terms analysis used an incorrect, lower standard; “relatively obvious” is not the legal test.

• Court guidance reaffirmed the presumptive “normal measure” for failed land deals (difference between contract price and market value) and directed damages reassessment.

• The inducing-breach claim against Alberta was set aside and must be determined afresh on retrial.

• Costs on appeal were awarded to CPR and Alberta at 50% of reasonable and proper legal fees plus disbursements, including the stay application; quantum to be assessed.

Facts of the dispute
Remington and CPR entered into three agreements for contiguous downtown Calgary parcels; two transactions closed and the third did not. CPR asserted the third parcel was not surplus to its operational needs and later closed a sale with Alberta in December 2007.

The contract terms at issue
Article 2.02 acknowledged only lands CPR determined “surplus to its operational requirements” could be sold. Article 6.05 required CPR to determine it was lawfully entitled to “make application to subdivide” and to set boundaries of the Subdivided Lands by a deadline. Article 6.08(c) confirmed CPR’s “absolute discretion” regarding which lands were surplus. A discrete issue concerned Lot 4, which was already subdivided yet included within the “Existing Parcel” definition for the Tenth Avenue agreement.

Trial decision and damages award
The trial judge found CPR breached the Tenth Avenue agreement and Alberta induced the breach, and awarded Remington $165,166,431 plus interest based on a lost-profits methodology rather than land value.

Appeal outcomes on liability and damages
The Court of Appeal allowed the appeals, dismissed Remington’s cross-appeal, and ordered a new trial. It held the trial judge committed legal error by failing to consider the contract as a whole and by implying terms using an incorrect “relatively obvious” standard, necessitating retrial. The Court also provided damages guidance: for failed real estate transactions, the normal measure is the difference between the contract price and market value as of the proper assessment date, and damages must be reassessed on retrial. The inducing-breach claim against Alberta was set aside to be decided afresh, contingent on the outcome of the new trial on CPR’s liability.

Costs decision on appeal
As successful parties on the appeal and cross-appeal, CPR and Alberta were awarded costs now, at 50% of reasonable and proper appeal fees plus disbursements, inclusive of the successful stay application; disputes on quantum may proceed to an assessment officer, and first-trial costs are for the trial judge at the end of any retrial.

Ruling and overall outcome
Overall, CPR and Alberta prevailed on appeal: the liability findings were set aside, a new trial was ordered, and they obtained appeal costs fixed at 50% of reasonable and proper fees plus disbursements, including the stay application, with the precise amount to be determined by assessment; no damages were affirmed in Remington’s favour at this stage.