In complex commercial disputes a single contractual breach can give rise to expansive damages claims. Whether it be an early termination, a delayed project, or a diverted customer, the initial breach creates conditions that give rise to multiple problems, some of which make other problems worse, until the damages claimed dwarf what you might expect would flow from the original breach.
These claims ask the court to attribute multiple consequential losses to a single breach. But unlike direct damages—the immediate revenue lost when a contract is terminated early—these downstream losses don't flow from the breach in an obvious, linear way. The breach creates adverse conditions, and problems multiply from there. Some of those problems may be connected to each other; others may be independent. The plaintiff's theory is that all of them trace back to the breach.
The theory behind these claims is intuitive: the breach set things in motion, conditions deteriorate, and problems accumulate—a snowball effect. But a snowball picks up material from everywhere as it rolls. The question for the court is which of the accumulated losses were actually caused by the initial breach, and which got brought in along the way.
The evidentiary challenge is proving that they actually do. Each claimed loss requires its own causal connection to the breach. And the further removed a loss is from the breach itself—in time, in directness, in the number of intervening factors—the harder it becomes to rule out alternative explanations.
The Vista v Zellers Case—Less Than 5% Recovered
A recent Ontario Superior Court decision, Vista Sudbury Hotels Inc. v. The Oshawa Group Limited, 2026 ONSC 313, awarded less than 5% of the plaintiff’s claimed damages (after what appears to be nearly 22 years of litigation)—a stark reminder that not everything that follows a breach is legally compensable.
The decision arose from a long-running commercial lease dispute between a mall owner and its former anchor tenant, Zellers.
Zellers shut down its store 321 days before the expiry of its lease. Zellers paid rent and maintenance through the balance of the lease. The Court's task was therefore only to assess consequential losses allegedly triggered by the early closure.
At first glance, an anchor tenant's departure seems exactly the kind of event that could trigger multiple downstream problems: an anchor tenant leaves early, neighboring tenants depart, traffic falls, and the economics of the mall unravel.
Multiple Losses from One Breach
The mall owner's damages theory claimed that one breach allegedly snowballed into multiple problems, causing the following losses:
- Urgent replacement negotiations requiring agreement to unfavourable terms: The mall owner claimed that desperation from the sudden vacancy forced it to have to offer unfavorable terms to a replacement anchor tenant who would replace Zellers (damages claimed - $4M).
- Tenant departures: The mall owner claimed six tenants terminated in the two years following Zellers’ announcement (damages claimed - over $3.3M combined).
- Emergency renovations: The mall owner spent $2.8M relocating the food court, building corridors, exterior improvements allegedly to prevent further loss (damages claimed- $2.8M).
- Renegotiation of pending deals: A movie theatre company that had signed a term sheet before the breach demanded better terms after Zellers' announcement (damages claimed - $285,911).
- Lost momentum: The shopping centre had previously been struggling, but had tried to revitalize and had reduced its vacancy from 59.7% (2001) to 41.5% (2003); the mall owner claimed that Zeller’s untimely closure in 2004 killed its momentum, and prospective tenants now avoided the mall (damages claimed - $1.6M).
- Collateral damage: Remaining tenants suffered sales declines and reduced their rent (damages claimed - $20,573).
Total claimed: $12,070,866
Total awarded: $570,216—less than 5% of the amount claimed
The Court's detailed analysis reveals exactly what evidence connected specific losses to Zeller’s breach when claims were successful and what was missing when claims failed.
The Evidentiary Gaps: What Was Missing
1. Urgent Replacement Negotiations Requiring Agreement to Unfavourable Terms
The mall owner claimed that it had to make concessions and offer inducements to a new tenant to replace Zellers.
What the mall owner offered as proof of damages: Expert testimony that one key term (a cap adjustment clause) was unfavourable, that reasonable inducements were offered to the new tenant, and that the mall owner was under time pressure.
Result: The Court found the “unfavourable” cap adjustment clause would have been required regardless of urgency. The replacement anchor tenant regularly negotiated terms like the cap adjustment into leases. A subsequent 2019 lease between the same parties included an identical clause.
Asserting that a concession by the mall owner was "forced by circumstances" was not enough. The mall owner needed evidence showing what would have been negotiated under normal circumstances versus what urgency actually drove. Of the $4M claimed, the mall owner was awarded ~$300,000 for other tenant inducements the Court held were reasonably required to fill a sudden, unexpected vacancy and would have arisen fairly, reasonably and naturally from the breach.
2. Tenant Departures
The mall owner claimed damages from tenants terminating their leases following Zellers’ breach.
What the mall owner offered as proof of damages:
- Expert testimony that anchor tenant departures typically hurt smaller tenants
- Testimony from the mall owner’s own personnel that foot traffic declined
- The temporal sequence of terminations
The mall owner did not have:
- Testimony from a single departing tenant about why they left
- Documentation from those tenants explaining their decisions
- Any contemporaneous communications with tenants about the impact of Zellers’ departure
Result: Of the $3.3 million claimed, the plaintiff recovered ~$60,000 (the mall owner was awarded recovery for very limited time periods in connection with three tenants who left shortly after Zellers’ announcement).
Even where the mall owner proved some causal connection between Zellers’ breach and a tenant that left, the Court imposed a critical limitation: Zellers would have left 321 days later anyway. Losses occurring after the Zellers lease expired face significant causation challenges – they aren’t caused by the breach (early closure), they’re caused by Zellers’ departure generally. Expert opinion about what “typically happens” wasn’t enough and temporal correlation could not establish causation. When third parties (customers, suppliers, tenants, employees) are central to the causation theory, you need their testimony or contemporaneous documentation explaining their decisions.
3. Emergency Renovations
The mall owner claimed extensive post-breach renovations were urgent mitigation including a food court relocation, corridors, tiling, painting, exterior work, signage.
What the mall owner offered as proof of damages: Evidence that the projects were expedited due to declining foot traffic and expert opinion that the work was necessary mitigation.
Result: All renovation claims rejected. Business plans, board minutes, budgets, and project timelines produced in the action all established that the renovations were already being planned prior to the breach and were "the next phase in the mall owner’s planned evolution of the Mall," not breach-driven mitigation.
4. Renegotiation of Pending Deals
The mall owner claimed a movie theatre operator who had signed a term sheet before the breach, demanded better terms after Zellers' announcement (specifically, that the mall owner assume responsibility for HVAC system costs and free rent offered).
What the mall owner offered as proof of damages: Direct documentary evidence showing changed positions before/after the breach (HVAC was supposed to be the tenant’s responsibility but after the breach, it became the mall owner’s responsibility).
Result: Full recovery of the $211,967 claimed for HVAC system costs. Direct documentary evidence showing changed positions before/after the breach was compelling because the Court could see exactly what terms changed and when. In contrast, the free rent offered to the movie theatre operated was not awarded, because a rent-free fixturing period was always contemplated between the parties.
5. Lost Momentum
The mall owner claimed lost rent from hypothetical future tenants that were deterred by the anchor vacancy.
What the mall owner offered as proof of damages:
- Expert "trend analysis" showing vacancy had been declining from 59.7% (2001) to 41.5% (2003)
- Extrapolation of that declining vacancy trend suggesting the mall owner was headed to 5% vacancy
- Calculation of lost rent from hypothetical future tenants
The mall owner did not have:
- Testimony from a single prospective tenant who considered leasing but declined
- Documentation of any specific lost opportunity
- Evidence of leasing discussions that fell apart after the breach
Result: Entire claim rejected. The Court found the mall owner failed to prove it "lost more than a mere chance or speculative claim." Expert modeling and trend extrapolation, without evidence of actual lost opportunities with identifiable parties, won't meet the burden of proof. Courts do recognize lost chance or lost opportunity damages but those damages require proof the opportunity had a reasonable probability of materializing.
6. Collateral Damage
The mall owner claimed that the remaining tenants' sales declined, reducing percentage rent payments (claimed: $20,573).
What the mall owner offered as proof of damages: Testimony from the plaintiff’s personnel that foot traffic declined 75-80% and a trend analysis.
Result: Entire claim rejected. Anecdotal testimony about business conditions isn't enough and the documents produced (transaction records, sales data, and financial statements) contradicted it. The remaining tenants’ sales did not decline. There were other reasons for reduced percentage rent payments: one tenant stopped paying percentage rent before the breach. Another tenant switched to fixed rent for reasons unrelated to sales performance and two other tenants’ percentage rent increased rather than decreased.
Key Takeaways
The 95% gap between the damages claimed by the mall owner and the awarded damages in this case illustrates what happens when the evidentiary foundation isn't there. Key evidence was missing: there was no testimony from departing tenants about their decisions and no specific lost opportunities were identified behind the trend projections.
Evidence showing this loss was caused by this breach—not by market conditions, strategic decisions, or the natural endpoint of the relationship will be required and parties must keep that in mind in pursuing damages. In defending the mall owner’s claim, Zellers didn't just argue that the mall owner couldn’t prove causation—it showed alternative explanations for the mall owner’s losses and backed those explanations up with data.
Vista v. Zellers provides a vivid reminder that courts won't accept the “snowball effect” narrative at face value. Every alleged loss requires specific proof of causation. Business problems rarely have a single cause. Customers leave, costs rise, and plans change for multiple reasons. A breach might be the primary driver for a business problem, one factor among several, or completely unrelated. Even where downstream negative effects appear to be intuitively related to the breach, anecdotal testimony about business conditions from party personnel and experts is insufficient where there is a lack of hard data and contemporaneous documentation of decisions or business conditions impacted by the breach.