Pacific Destinations Properties Inc. v. Granville West Capital Corporation

Citation: Pacific Destination Properties Date: 19990224 Inc. v. Granville West Capital Corp. Docket: CA024288 1999 BCCA 0115 Registry: Vancouver COURT OF APPEAL FOR BRITISH COLUMBIA BETWEEN: PACIFIC DESTINATION PROPERTIES INC. and ROBERT BOYLE ASSOCIATES LTD. PLAINTIFFS (RESPONDENTS) (APPELLANTS BY CROSS-APPEAL) AND: GRANVILLE WEST CAPITAL CORPORATION DEFENDANT (APPELLANT) (RESPONDENT BY CROSS-APPEAL) Before: The Honourable Mr. Justice Cumming The Honourable Madam Justice Huddart The Honourable Mr. Justice Mackenzie G.S. McAlister, S.R. Miller Counsel for the Appellant J.G. Dives, H.K. Dhillon Counsel for the Respondents Place and Date of Hearing Vancouver, British Columbia February 15 and 16, 1999 Place and Date of Judgment Vancouver, British Columbia February 24, 1999 Written Reasons by: The Honourable Mr. Justice Cumming Concurred in by: The Honourable Madam Justice Huddart The Honourable Mr. Justice Mackenzie Reasons for Judgment of the Honourable Mr. Justice Cumming: [1] This is an appeal from the judgment of Mr. Justice Spencer pronounced 26 January 1998. The trial judge awarded the plaintiff Robert Boyle Associates Ltd. ("RBA") damages in the sum of $357,149 for unpaid architectural and management services on a hotel and marina development. The appeal relates to the sum of $180,374 awarded in respect of architectural service fees for the hotel portion of the project. In its cross-appeal RBA seeks additional damages of $176,114 for breach of contract. [2] The underlying action was brought for payment of fees claimed to be due and owing to the plaintiff RBA for prime consultant (architectural) and development management services payable under a joint venture agreement between the parties to develop a marina and hotel in Sidney, British Columbia. Alternatively, the plaintiff claimed damages for breach of contract by which the defendant Granville West Capital Corporation ("Granville West") prevented the plaintiff from earning its fees under the agreement. In the further alternative, the plaintiff claims on the basis of quantum meruit. [3] Granville West appeals from the award for damages in quantum meruit for prime consultant services actually performed by the plaintiff in respect of the hotel. The plaintiff, in turn, cross appeals from that part of the judgment refusing to award damages based upon services which would have been provided by the plaintiff but for the fundamental breach of the development management agreement by Granville West which the learned trial judge found to have occurred. HISTORY OF THE PROCEEDINGS [4] The action was commenced in 1992 and went to trial in two stages. The first trial came on for hearing on March 27, 1995 before Madam Justice Baker. The second proceeded before Mr. Justice Spencer on October 20, 1997 and it is from his judgment granting relief in quantum meruit that Granville West appeals and the plaintiff cross appeals. [5] In its original defence to the plaintiff's action, Granville West denied the existence of any agreement with the plaintiff. It denied that the plaintiff was entitled to an equity interest in the project or to fees for architectural or development management services related to the Sidney marina or hotel, or to damages for breach of contract. [6] On the eve of the March 27, 1995 trial date, Granville West conceded that there was in fact an agreement between the parties. Granville West consented to judgment on the equity claim, resulting in an award to the plaintiff Pacific Destination Properties Inc. of a 30% interest in Granville West's equity in the Sidney marina and hotel project. On the issue of fees claimed by the plaintiff RBA, Granville West took the position that the hotel project has been "abandoned" under the agreement and that as a result no fees related to the hotel were payable. [7] The plaintiff's claim for payment of fees remained in dispute and the trial of this issue came on for hearing before Mr. Justice Spencer on 20 October 1997 and lasted six days. The defence of "abandonment", the late raising of which resulted in the adjournment of the 1995 trial date, was itself abandoned by Granville West just prior to the start of the 1997 trial. Granville West confirmed to the court that its defence would be that no fees were payable because the agreement had terminated at its termination date of December 1, 1991 without a hotel being in place. [8] The learned trial judge found that: (a) Granville West had terminated the prime consultant part of the agreement, which provided for the payment of fees for architectural services, in accordance with the termination clause in the agreement; and (b) Granville West had fundamentally breached the management services part of the agreement. [9] The learned trial judge declined to grant relief on the basis of fees due and owing for services performed under the contract because an alleged pre-condition to payment had not yet materialized at the time the agreement was terminated by fundamental breach (as to the development management part) or terminated lawfully under the termination provision (as to the prime consultant part) of the agreement. Instead, his Lordship awarded damages under quantum meruit for prime consultant and development management work performed by the plaintiff up to the date of termination. [10] The learned trial judge in the alternative found there to be a term implied in the agreement that, on termination, the plaintiff would be entitled to payment for services provided up to the date of termination. His Lordship refused to award the plaintiff any damages for Granville West's breach of the development management services part of the agreement which prevented the plaintiff from earning any development management services after the date of termination, which flowed from its acceptance of the repudiation. ISSUES ON APPEAL [11] In this appeal Granville West challenges that part of the award which relates to the payment of fees for prime consultant (architectural) services actually provided for the hotel before the lawful termination of the prime consultant agreement. In answer the plaintiff RBA says that the agreement with respect to prime consultant services contained a termination clause which expressly provided for payment for prime consultant work done prior to the date of termination. The plaintiff submits that, as quantum meruit provides restitutionary relief for the prime consultant work which had been done, if the trial judge were in error in this regard such error does not affect the result. [12] In its cross appeal the plaintiff submits that the learned trial judge erred in failing to award any damages for breach of the development management part of the agreement in respect of the hotel. DISCUSSION [13] In his reasons for judgment the learned trial judge said: [18] There are differently worded provisions for the payment of prime consultant fees in appendix B but I find they have the same effect as does appendix A for the management fees. The fees became payable when the hotel project was funded and approved. ... [74] In his written argument the plaintiff's counsel acknowledged that it had accepted the repudiation. I find the plaintiff's April 2, 1991 letter (Ex.4, #124) in which it made its claim for payment did that. The letter does not distinctly allege breach by the defendant. However, it claims payment in full of all the fees ignoring the requirement under the agreement that the hotel should not only be funded but should also be approved before fees were due. It too, then, ignores a term of the agreement and demands payment immediately. In my opinion that is an implied acceptance of the defendant's repudiation. It showed that the plaintiff no longer intended to be bound by the agreement. [75] Under that circumstance, the plaintiff is entitled to claim payment either under the agreement, which here does not permit it by its terms until the hotel is approved, or to elect to claim damages in quantum meruit for the work already done. That would not depend upon the agreement but upon the concept of quasi contract. Such a claim was made in the plaintiff's opening. Another solution is for the court to imply a term that if the defendant refused to continue to employ the plaintiff at a time before the pre-condition of payment arrives, the plaintiff should receive payment under the agreement for its services to date. ... [81] Whichever solution is adopted, whether that of quantum meruit or that of implied term, the result in damages would in my judgement be the same. The plaintiff would be entitled to the value of its work to date based on reasonable rates. They are the standard professional charges at the time. They are the same as the levels of remuneration fixed by the agreement. ... [86] With respect to the hotel, including the congregate care facility which was originally to be a part of it, the plaintiff had performed prime consultant services up to September 7, 1990 when its services were terminated as provided for in the agreement. Appendix B of the agreement, under the heading "stages of services", provided that consulting and advisory services, site analysis, schematic design and development design services should represent 30% of the fee. I find all that work was done. The agreement is silent about the payment of fees already incurred if the agreement was properly terminated but before approval of the hotel was obtained. I am of the opinion that the remedy in quantum meruit is the appropriate solution in law to this problem. [14] The plaintiff submits that the learned trial judge fell into error in finding that the lawful termination of the prime consultant part of the agreement by Granville West before approval for the hotel had been obtained precludes the plaintiff from being paid its prime consultant fees with respect to the hotel for work done by it on the hotel. Because of this error the court resorted to quantum meruit as the basis for recovery for prime consultant services performed by the plaintiff. The plaintiff submits that the learned trial judge failed to consider that there was an express contractual provision for the discharge of the prime consultant portion of the agreement which obligated Granville West to pay for all prime consultant services performed to the date of lawful termination. Specifically, it is expressly stated in the general conditions of the prime consultant agreement (Appendix D) that: [T]his Agreement may be terminated by either party upon seven days written notice. The Architect shall be compensated for all services performed to termination date, together with reimbursable expenses. [15] It is noted that Granville West relies on the fee schedule to the prime consultant agreement (Appendix B) which provides that: The Prime Consultant will provide all services up to the completion of the Developed Design Services on a deferred payment basis. At the time approvals have been received and project funding secured, fees incurred to date will be reimbursed. Should the project be sold, in portion or in whole, fees incurred to date would be due at this time. [16] Appendix B provides for deferral of payment of architectural fees to a certain stage unless there is a sale of the project either in part or in whole, at which point fees earned are due and payable. Appendix D contains a termination clause which calls for payment of fees earned at the time of termination. [17] The two provisions are not inconsistent when read in the context of the agreement as a whole. Both call for payment of fees upon significant changes in the contractual relationship between the parties. For example, Appendix B provides for a method of payment (deferral to a certain stage) which assumes an ongoing contractual relationship between the parties. The deferral ceases to apply in the event Granville West seeks to vary the contractual agreement of the parties by sale of the project. If so, the deferred payment is accelerated. Similarly, Appendix D's termination provision deals with the acceleration of the payment obligations in the event of a lawful discharge of the contract. Both provisions are consistent and complementary. [18] Granville West relied on the contractual termination clause when it removed the plaintiff as the prime consultant in September 1990. There was a proper termination of the prime consultant agreement by Granville West as of September 7, 1990 (by which time Granville West had already deliberately excluded the plaintiff from any further work or further participation on the project). [19] In his analysis of the prime consultant aspect of the case, the learned trial judge noted at para. 86, that the "[prime consultant] agreement is silent about the payment of fees already incurred if the agreement was properly terminated but before approval of the hotel was obtained". Yet, when dealing with development management services, the learned trial judge held that, as an alternative to quantum meruit, he would find an implied term that, upon the defendant's refusal to allow the plaintiff to provide services before the "pre- condition for payment" happened, the plaintiff should be paid for services already provided. In my respectful view, the trial judge, in respect of the prime consultant agreement, overlooked or misunderstood the express provision calling for payment of all work performed to the date of termination upon invocation of the termination clause. [20] A termination clause is an express provision agreed to by the parties for discharge of the contract. The Court should give full effect to such a provision. See: Chitty on Contracts, (27th ed., 1994) "Provision for Discharge in the Contract Itself", pp. 1090-1091, paras. 22-043 - 22-045. [21] In the case at bar the payment of all fees earned by the plaintiff to the date of termination was a condition of unilateral discharge. Regardless of any other provision, lawful termination under the contract by Granville West triggered compensation for all prime consultant services provided by the plaintiff. Hence, it was not necessary for the learned trial judge to go outside the contract and to apply quasi-contractual principles of quantum meruit to find entitlement to payment of fees and I do not find it necessary to consider those aspects of the matter further. [22] The amount awarded by the trial judge is the same as it would have been had the termination clause been the basis of recovery, as I think it should. [23] I would, accordingly, dismiss the appeal. [24] I turn now to the cross-appeal. [25] The plaintiff submits that the learned trial judge erred in failing to award it damages for Granville West's breach of the development management services agreement or, alternatively, damages for loss of opportunity to earn development management fees in respect of the hotel. The plaintiff argues that the trial judge was wrong in limiting its recovery to an award based on quantum meruit. [26] The parties had an agreement which provided, inter alia, that RBA would furnish development services under a connected but different agreement, in respect of a multi-faceted project including a marina, a hotel, and a congregate care facility. Development management services included virtually all aspects of bringing the project to fruition except for financing (which was the responsibility of the defendant) and architectural services, which were to be provided by RBA under a connected but different agreement for prime consulting services. [27] The learned trial judge found this agreement to provide development management services in respect of the hotel portion of the project was fundamentally breached by the defendant Granville West when it took over responsibility for development management services and prevented the plaintiff from providing services under that agreement. In this regard he said: [56] I find on the evidence that after September 7, 1990 Mr. Pullen represented the defendant to Sidney Town in discussions about the hotel project and in attempts to present a third application for rezoning. He utilized the services of Mr. Annand's firm to assist him with the presentation. In 1991 Mr. Pullen pursued a fourth unsuccessful application for rezoning. He excluded the plaintiff from this work which fell within the parameters of the development management agreement. He had formed the intention of excluding the plaintiff from all of the remaining development management work for the hotel project. All of that was in fundamental breach of the agreement to employ the plaintiff for development management services. ... [73] The finding that one of the pre-conditions for payment of fees was not met does not necessarily mean that the plaintiff is not entitled to receive payment for the work it has already done on the hotel project. I am satisfied that the defendant excluded the plaintiff from the development management work after September 7, 1990 with the intention that its services should never again be used. That was a fundamental breach, a repudiation of the hotel management part of the agreement. Such a repudiation does not terminate the agreement unless the plaintiff accepted it. [28] As at the time of the trial the hotel project was still under Granville West's control. The learned trial judge found that it was still the intention of Granville West to proceed with the project at some time. The evidence established that the hotel site had been rezoned and that the hotel project had received development permits. [29] The learned trial judge held there was no claim for damages for breach of contract. His Lordship awarded only quantum meruit damages in respect of services that had actually been provided prior to the date of the fundamental breach of the agreement. The learned trial judge based this finding on a provision in the agreement providing that payment of fees would be deferred until the project was "approved", meaning thereby that a building permit had been issued. [30] In this regard he said: [26] Although I find that the hotel project was partially funded, the agreement also makes approval of the hotel project a pre-condition of payment of both prime consultant and management fees. It is silent about whose approval was meant. The evidence is undisputed that Sidney Town rezoned the site for hotel use in 1994 or 1995. There was no evidence that it has ever approved any hotel plans for the purpose of issuing a building permit. Without municipal approval neither Port Sidney Holdings Ltd., nor the present owner Port Sidney Development Ltd., nor the defendant as the parent company of both, could build the hotel. In my judgement the approval referred to in appendices A and B of the agreement must be that of the municipal authority, Sidney Town. This appears to be contrary to the position taken by Granville West at the trial that "approval" meant zoning changes and the issuance of a development permit, not the issuance of a building permit. [31] The plaintiff submits that the effect of these findings is that, had Granville West taken out a building permit prior to the date of trial, the plaintiff would have been entitled to damages for the breach of contract but if Granville West were not to take out a building permit until after the trial, there could be no claim for damages for fundamental breach. [32] The plaintiff contends that this result is illogical and arises primarily from two errors made by the learned trial judge: the first, in finding, contrary to the position of the parties and the evidence as a whole, that the parties intended payment to be made only upon the issuance of a building permit; and the second, in holding that it was an essential element of the plaintiff's claim that it prove on the balance of probabilities that "approval" of the hotel within the parameters of the plaintiff's design had been given prior to trial or would have been given but for "bad faith" on the part of the defendant. Did the hotel receive approval as contemplated in the payment provisions of the development management agreement? [33] In his opening, counsel for the defendant stated that "approval" under the contract meant obtaining a change in zoning and the issuance of a development permit. At no time during the trial did counsel for the defendant resile from that position. [34] The testimony of both Mr. Boyle and Mr. Pullen, the principals of the plaintiff and defendant respectively, on the issue of approval by Sidney Town Council, always related to approval of the hotel design which would lead to a requested zoning change and issuance of development permits. There was no suggestion that Council would even be involved in the issuance of a building permit. [35] There was no evidence before the learned trial judge from which he could conclude that the parties had discussed the question of "approval" at the time of entering into the contract in the context of the issuance of a building permit. Moreover, there was no evidence before the learned trial judge indicating that either of the parties subsequently regarded the contract as relating to the issuance of a building permit. [36] Mr. Boyle gave evidence, uncontradicted by Mr. Pullen, regarding the discussions between them with respect to the deferral of fees. Mr. Boyle's evidence was that the agreement between them was that as they would be considering a number of projects, some of which might never proceed, each party would bear its own costs at the outset. Should a project not proceed beyond the preliminary assessment stage, there would be no reimbursement for these initial costs. [37] The plaintiff submits that the wording of the November 3rd documents is consistent with this stated intention and that the proper interpretation of the documents is that "approval" simply means such approvals as were reasonably necessary to demonstrate that the project would be proceeding beyond the preliminary assessment stage. With respect to the hotel, this logically leads one to the conclusion that "approval" meant rezoning and the issuance of a development permit after which detailed design drawings would be prepared and Granville West, at its discretion, could apply for the issuance of a building permit. Whether the plaintiff was required to establish on a balance of probabilities that approval of the plaintiff's design would have been given. [38] The plaintiff submits that, having found a fundamental breach of the agreement by the defendant, the learned trial judge was in error in concluding that no damages could be awarded absent proof by the plaintiff that the Town of Sidney would have approved a hotel within the parameters of the plaintiff's design. [39] The development management agreement is separate and distinct from the prime consultant agreement. In its role as architect and prime consultant, the plaintiff (through Robert Boyle) was to develop the resort concept to the design stage, prepare the designs, prepare the working drawings, help to retain and co-ordinate all sub-consultants on the project, and ensure the construction of the project to code specifications. On the other hand, in its role as development manager for the marina and hotel, the plaintiff would be responsible for the all inclusive development of the project from start to finish, including planning timelines and preparing budgets, evaluating all tender documents, interviewing and qualifying contractors, obtaining all necessary permits and approvals, dealing with third party user requirements, and ensuring the complete integration of the project's various components (marina floats and pilings, marina building, and hotel). The development management agreement and the services to be provided thereunder are independent of the design aspects covered under the prime consultant agreement. It is clear that even if a different architect were retained who developed an entirely different design which resulted in approval by the municipality, the plaintiff would still have been entitled to provide the development management services in respect of the hotel project. With respect, it appears that the learned trial judge confused the obligations arising under the development management agreement with those existing under the prime consultancy agreement which was terminated in September of 1990 pursuant to the contract. [40] Thus, in my view, the evidence establishes that the hotel has been "approved" insofar as that could be said to be a precondition to payment under the contract or to a claim for damages for breach of contract. Damages for breach of agreement [41] Granville West was found by the learned trial judge to have fundamentally breached the agreement with the plaintiff relating to development management services. The plaintiff submitted that the consequence to Granville West of its breach is that it is liable to compensate the plaintiff for the loss the plaintiff has sustained as a result of Granville West's failure to perform its obligations under the contract. Those obligations include the continued retainer of the plaintiff for provision of development management services for the hotel. See: Chitty on Contracts (27th ed. 1994) p. 1177 - 1179 at para. 24-043 to 24-044 where the learned author states: Position of innocent party. * * * Although both parties are discharged from further performance of the contract, rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected. Thus the innocent party can retain or recover sums paid or due before the time at which the repudiation is accepted by him and may maintain an action for damages in respect of any cause of action vested in him at that time. * * * Position of Guilty Party. Upon discharge, the primary obligations of the party in default to perform any of the promises made by him and remaining unperformed come to an end, as does his right to perform them. But for his primary obligations there is substituted by operation of law a secondary obligation to pay to the other party a sum of money to compensate him for the loss he has sustained as a result of the failure to perform the unperformed primary obligations. [42] In response, the defendant argues that the plaintiff is not entitled to maintain an action for damages for breach of contract because it has recovered all of what is due to it in the award of $75,126 on a quantum meruit basis. Counsel referred to Morrison-Knudsen Company Inc. et al v. British Columbia Hydro and Power Authority (No. 2), [1978] 4 W.W.R. 193 where, at p.245, this Court said: It is necessary at the outset to distinguish between the two kinds of election that one must consider in a case such as this: an election between inconsistent rights and an election between alternative remedies. When faced with a fundamental breach the innocent party to a contract may elect to affirm the contract and hold the other party to the performance of its contractual obligations and sue as well for damages. On the other hand, he may elect to accept the breach as a repudiation of the contract. This is an election between inconsistent rights. It must generally be made with promptitude and communicated to the other party, and, once made, it is irrevocable. Where a plaintiff, having elected to accept the breach as a repudiation, commences proceedings for his remedy, he may have, in a proper case, the right to quantum meruit as an alternative to the right of damages. His election between these alternatives is an election between alternative remedies and need not be made until judgment. The taking of judgment on one of the alternatives binds the plaintiff and he may not then have the other remedy. and submitted that, in the case at bar, the plaintiff had made the "wrong election". I do not agree, for this submission completely misses the main point of the plaintiff's cross- appeal. The plaintiff did not elect to confine itself to a remedy based on quantum meruit. It argues in its cross-appeal, correctly in my view, that the trial judge was in error, for the reasons I have already discussed, in concluding that quantum meruit was the only remedy open to it. [43] In further answer to the plaintiff's cross-appeal the defendant submits that the plaintiff is, in any event, not entitled to management fees for the whole hotel project because the development management agreement came to an end before any approvals whatsoever were received. I am unable to accede to this submission. The learned trial judge stated his conclusion thus: [39] So I find that the agreement for management services did not end automatically on December 1, 1991. He found as well, at para. 19, that the "exhibits show a continuing intention to develop the hotel. Nothing in the evidence suggests that intention has changed". These are essentially findings of fact for which there is ample support in the evidence before the trial judge and this Court should not interfere. [44] The damages which the innocent party ought to receive in respect of breach of contract are those which may fairly and reasonably be considered either arising naturally from the breach of it or as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. See: Hadley v. Baxendale (1854), 9 Ex. 341, 156 E.R. 145. [45] Had Granville West kept the bargain it made with the plaintiff, the plaintiff would have been entitled to earn fees for development management services for a hotel. [46] The evidence in this case establishes an entitlement to damages for the plaintiff's having been denied the opportunity to do development management work and earn fees in respect of the hotel. The defendant continues to own the property upon which the hotel was to be developed; has indicated an intention to proceed with the hotel development; and is in a position to proceed with such development by simply obtaining a building permit. The defendant would be able to complete a hotel development at the site if it chooses to do so. Its failure to proceed in that regard and the hotel not having been completed at the time of trial is no basis for denying the plaintiff's claim in damages. Had the defendant, for economic or other reasons, concluded that it had the option to was not feasible to proceed with the hotel development on the site, it had the option to either dispose of the project or truly abandon it. The defendant did neither and the only reasonable conclusion to be drawn is that which the trial judge drew, namely, that the defendant still intends to proceed with the project. [47] The plaintiff submits that the learned trial judge erred in law by allowing a party who repudiates an agreement before some contractual conditions can be met to set up that fact as a defence to a claim for damages for breach. Repudiation of an agreement by a party amounts to a denial of its binding force. Granville West, having repudiated the development management services agreement before municipal approvals could be obtained, should not be able to set up the lack of such approvals as a defence to its breach of contract. See: Yukon Gold Co. v. Canadian Klondyke Power Co. (1919), 47 D.L.R. 146 at 146-147, 152-153 (B.C.C.A.). [48] A person cannot take advantage of a state of affairs which he himself has produced by his or her own wrongful act. This rule was set down by the Privy Council in New Zealand Shipping Company v. Societe des Alteliers et Chantiers de France, [1919] A.C. 1 where Lord Atkinson stated the following at 9: It is undoubtedly competent for the two parties to a contract to stipulate by a clause in it that the contract shall be void upon the happening of an event over which neither of the parties shall have any control, cannot bring about, prevent or retard. ... But if the stipulation be that the contract shall be void on the happening of an event which one or either of them can by his own act or omission bring about, then the party, who by his own act or omission brings that event about, cannot be permitted to either insist upon the stipulation himself or to compel the other party, who is blameless, to insist upon it, because to permit the blameable party to do either would be to permit him to take advantage of his own wrong, in the one case directly, and in the other case indirectly in a roundabout way, but in either way putting an end to the contract. [49] Similarly, "where a contractual arrangement depends upon the continuance of a state of affairs known to both of the parties, there is an implied obligation on the parties not to put an end to that state of affairs. ... A man cannot take advantage of his own wrong." See: Gillespie et al v. Bulkley Valley Forest Industries Ltd. (1973), 39 D.L.R. (3d) 586 at 596 [aff'd 50 D.L.R. (3d) 316 (C.A.)] [50] Furthermore, once the plaintiff accepted Granville West's breach as repudiation, it was no longer obligated to perform any conditions precedent to its right to enforce payment under the contract. See: Christie v. Dongen (1980), 24 B.C.L.R. 61 (S.C.). [51] The issue of whether a condition would have ultimately been met in the absence of breach may be relevant to an assessment of the quantum of damages payable in any particular case. It should not be a bar to the claim for damages for breach. In the present case, the approval contemplated by the parties was obtained by Granville West after the breach but before the date of trial. The approval provides an evidentiary basis for the claim that the plaintiff has been deprived of the right to earn development management fees on the hotel for which it is entitled to be compensated in damages. [52] Any uncertainty as to damages because of an unknown outcome may be dealt with by applying a deduction on the basis of contingencies. In BEM Enterprises Ltd. et al v. Campeau Corporation (1981), 32 B.C.L.R. 116 (C.A.) the appellant entered into an agreement to purchase land from the respondent, which agreement contained a provision that the purchase was subject to certain conditions involving the purchase of other land, linkage of the land to the subject land under the contract, and the obtaining of zoning and other approvals. The trial judge found that there was an implied obligation upon the appellant to use its best efforts to meet the conditions, which was breached. This basis of liability was affirmed by this Court. Seaton J.A. noted, at 117-118: When the respondents are put in the position they would have been in had there been no breach, they do not have a sale. There are still conditions to be met before the appellant is bound to proceed. The bargain that the respondents lost was not a simple sale. It was a sale subject to the conditions I have mentioned. ... We must fix the damages taking into account the contingency that the conditions necessary for completion of the project could not be met. In my view, a fair approach to the matter is to deduct from the damages an amount of 20 percent as an allowance for that contingency. I therefore allow the appeal and reduce the award of damages by 20 percent. In all other respects, I would dismiss the appeal. [53] In the alternative, the plaintiff submits that the defendant has clearly breached the agreement, giving rise to a claim for damages and, at the very minimum, that claim should be for the lost opportunity to provide the development management services for the hotel project which was contemplated at the time and which, albeit in somewhat different form, is still proceeding. [54] In assessing damages for loss of opportunity the court must reach a conclusion as to what would have taken place had there been no breach. If it is shown with some degree of certainty that a specific contract was lost as a result of the defendant's breach, some damages should be awarded. Even though the plaintiff may not be able to prove with certainty that it would have obtained specific results but for the breach, it may be able to establish that the defendant's breach deprived it of the opportunity to obtain such business. See: Houweling Nurseries Ltd. v. Fisons Western Corporation (1988), 37 B.C.L.R. (2d) 2 (C.A.). [55] In Bradshaw Construction Ltd. v. Bank of Nova Scotia (1992), 73 B.C.L.R. (2d) 212 (C.A.) this Court considered the principles applicable to damages, including a claim of a loss of opportunity. At pages 228-229, the court referred to the following as a correct statement of the applicable law for loss of opportunity (as set out by the trial judge): When deciding whether the plaintiff suffered any damages as a consequence of the actions of the defendant, Bradshaw must prove the existence of a loss on a balance of probabilities. It has done so. But when it comes to assessing the actual amount of the loss the standard of proof is not so strict. Determining the amount of damages in these circum- stances is largely a matter of assessing the strength and weaknesses of various possibilities. It is much like measuring the amount of a past or future loss of income in a personal injury action. The more certain the possibility of the loss the greater the award; the less certain the possibility the smaller the award. When looking at events that may have taken place but for a certain event, it is impossible to say what would have probably happened when that event came about, because one does not know the nature of the circumstances at the relevant time when the event might have occurred. The best that can be estimated are the possibilities, not the probabilities. [56] On the evidence, Granville West, by its fundamental breach, appropriated the development work and delayed in obtaining the approvals at a cost to the plaintiff, who lost the opportunity to earn fees for obtaining the approvals and managing the development of the hotel project. [57] The fact that a rezoning was obtained, and a development permit issued, supports the plaintiff's position that the benefit lost by the breach was a right to earn fees. It was not an opportunity based on conjecture. [58] Applying the principles for recovery of damages to the known facts, that the hotel would probably have been approved, and subsequent to the breach was approved and a development permit obtained, entitles the plaintiff to be placed in the same position it would have been in had the contract been performed. To refuse the plaintiff's claim puts the parties in the same position as if the defendant had a contractual right to terminate without cause. The amount of the claim [59] The trial judge determined that the value of the hotel for purposes of determining fees was $12,526,000. The development management fees in respect of that sum would have been 2% or $251,240 of which the learned trial judge awarded the sum of $75,126 for services provided prior to the breach on a quantum meruit basis. The plaintiff in its cross-appeal claims the balance of $176,114 but, in my view, having regard especially to the passage of time, the fact that the project has not yet proceeded to completion, and other uncertainties attendant upon a project of this nature, some discount for contingencies is appropriate. [60] I would fix a discount of one-third and thus allow the cross-appeal to award the plaintiff damages in the sum of $167,494 in lieu of the award on quantum meruit. [61] The plaintiff is entitled to its costs. "THE HONOURABLE MR. JUSTICE CUMMING" I AGREE: "THE HONOURABLE MADAM JUSTICE HUDDART" I AGREE: "THE HONOURABLE MR. JUSTICE MACKENZIE"