What happens when appellate judges know an appeal should be allowed but counsel have not argued the proper basis to do so? The Ontario Court of Appeal faced this issue in Dasham Carriers Inc. v. Gerlach. The case concerned the wrongful termination of a lease. The trial judge correctly stated the law to be applied for assessing damages in these circumstances. One of the elements is subtracting the amount of rent the plaintiff would have paid in any event from the total damages. But despite acknowledging that he needed to do so, when ultimately calculating the damages, the trial judge forgot this step.

Epstein J.A. found this easy enough to correct on appeal – simply remove that amount from the overall damages. However, counsel for the appellant had not argued for this approach. What to do? Epstein J.A. held:

[35] I appreciate that the approach I have taken to resolve the application judge’s oversight in not deducting the $70,000 in rent owed to the appellant in his calculation of damages was not argued by counsel for the appellant. Normally, I would not determine an appeal on a basis not put forward by counsel as it is counsel’s responsibility, not the court’s, to advance a party’s position. However, as I see it, there is a factor that allows me to proceed as I have. My analysis tracks that of the application judge but for a correction that is necessary in order to bring the final calculation in line with his reasons. The application judge, as I have said, accurately identified the way in which the respondent’s damages should be calculated and noted, a number of times, that the $7,000 monthly rent the respondent owed to the end of the lease must be deducted from the rental income it would have received from the subtenants. The respondent was required to pay rent in order to use the leased premises for the purposes of earning rent money from the subtenants. Subtracting the cost of having access to the leased premises is an essential part of putting the respondent in the position as though the contract had been fulfilled. [emphasis added]

[36] I am of the view that endorsing the application judge’s reasoning to this effect fits precisely within the jurisdiction provided in s. 134(1)(a) of the Courts of Justice Act, R.S.O. 1990, c. C.43. This section gives this court unconditional authority to “make any order or decision that ought to or could have been made by the court or tribunal appealed from.” The guiding force, as it invariably is and must be, is the interests of justice.

[37] In my opinion, in these circumstances, it is in the interests of justice to apply the correct law and give effect to the application judge’s analysis.

This case may be confined to its unique facts – Epstein J.A. stated that she viewed this as “a mere error in calculation as opposed to an error of law.” But it still demonstrates that appellate judges retain discretion in how to resolve appeals in a manner that is just. It is worth observing that Epstein J.A. gave no order for costs in these circumstances.