Trevor Todd and Jackson Todd have over sixty combined years of experience in estate litigation including claims for punitive damages for egregious conduct of an executor/trustee.
PUNITIVE DAMAGES IN ESTATE LITIGATION
Punitive damages, also known as exemplary damages, have a long history in English common law dating back several centuries. Punitive damages are not compensatory. Their primary purpose is to punish egregious wrongdoing and deter similar misconduct in the future, rather than merely compensating the injured party. Punitive damages are awarded over and above the actual loss suffered by the plaintiff as punishment to the defendant and to deter him/her and others from committing similar acts.
Before punitive damages can be awarded the act done must not only be such that by itself would merit punishment, but should also be one that was intentionally directed to the person or property of the injured person. Kaytor v Lyons Driving Range Ltd (1962) 40 WWR 173.
In the leading case Whiten v Pilot Insurance Co. 2002 SCC 18 the Supreme Court of Canada commented on the purpose for punitive damages . The court declared that retribution, denunciation and deterrence are the recognized justifications for punitive damages.
The court observed that an award of punitive damages must be:
1. proportionate to the blameworthiness of the defendant’s conduct;
2. proportionate to the vulnerability of the plaintiff;
3. proportionate to the harm or potential harm directed specifically at the plaintiff;
4. proportionate to the need for deterrence, and
5. proportionate to the advantage wrongfully gained by the defendant from the misconduct.
Whiten v. Pilot Insurance also set out some further principles to be considered in making an award of punitive damages:
1. they are the exception rather than the rule;
2. they are generally awarded only where the misconduct would otherwise be unpunished or other penalties are unlikely to achieve the objectives of retribution, deterrence, and denunciation;
3. punitive damages are awarded only if compensatory damages are insufficient to accomplish these objectives;
4. the purpose of punitive damages is not to compensate the plaintiff, but to give the defendant his or her just desert, to deter the defendant, and others similar misconduct in the future, (deterrence) and to mark the community’s collective condemnation of what has happened.
Whiten v Pilot Insurance at para.113 sets out factors that determine the level of the defendants blameworthiness. These factors include:
a) whether the misconduct was planned and deliberate;
b) the defendant’s intent and motive;
c) whether the defendant persisted in the outrageous conduct over a lengthy period of time;
d) whether the defendant concealed or attempted to cover up their misconduct;
e) the defendant’s awareness that what they were doing was wrong;
f) whether the defendant profited from their misconduct; and
g) whether the interest violated by the misconduct was known to be deeply personal to the plaintiff.
Punitive Damages in Non-Estate Cases
It has only been in recent years that Canadian courts have begun to award punitive damages for reprehensible conduct in estate litigation matters.
There have been significant awards for punitive damages in recent years for bad faith conducted by insurance companies, wrongful dismissal and defamation.
In February 2025 the largest punitive damages award in Canadian history was awarded in the case of Baker v. Blue Cross Life Insurance Company of Canada 2023 ONCA 842 . The Ontario Court of Appeal upheld the jury decision to award $1.5 million in punitive damages for the insurance companies’ long-term denial of disability benefits following a stroke that the plaintiff suffered in 2013.
In Hill vs. Church of Scientology of Toronto (1995) 24 O.R. (3d) 865 the Supreme Court of Canada upheld a total award of $1.6 million, which included 800,000 for punitive damages to a crown attorney defamed by the church of Scientology.
Punitive Damage Awards in Estate Litigation
For reasons that are not exactly clear, the courts were historically loath to award significant punitive damages awards in estate litigation. Typically if the courts wished to punish a personal representative or fiduciary it would be by way of special costs. This usually meant payment of full indemnity of the wronged parties legal fees .
While special costs can be substantial, the courts have in recent years been cautiously more willing to award punitive damages in estate matters where the conduct was so egregious that the defendant should be punished for malicious, oppressive and high-handed misconduct that represents a marked departure from ordinary standards of decent behavior.
A review of earlier decisions prior to approximately the last 15 years reflects the reluctance of the courts to award punitive damages in estate litigation matters.
For example, in the decision S.G.W. v D.W.W. (1998) B.C.J. NO. 840, the court found that even though the personal representative’s behavior was reprehensible, no punitive damages were awarded.
Similarity in Saarnok v McNeil 1992 BCJ NO.1880 no punitive damages were awarded where the courts set aside various gifts for undue influence.
In Saarnok the plaintiff was an 83- year-old man and the defendant a 31-year-old woman. They met at a funeral. It was alleged that she had offered to provide sex to the plaintiff periodically in return for some gifts. He then bought her an apartment, made her his sole beneficiary, bought her a Corvette, began to transfer a half interest in his apartment to her, bought her furniture, endorsed $13,000 worth of cheques to her and began adoption proceedings. He also paid her $45,000 (at $2,000 monthly) for services as his personal secretary.
While the courts found her behavior morally reprehensible, they did not feel that an award of punitive damages was warranted.
(I venture to opine that the same facts decided today would likely attract a significant award for punitive damages).
The cautiousness of the courts to award significant punitive damage awards in estate matters radically changed in the years since about 2012 to date.
In one of the first larger awards for punitive damages in an estate dispute, Walling v Walling 2012 ONSC 6580 , a trustee acted with extreme bad faith in delaying the estate distribution and hiding assets. The court awarded punitive damages of $100,000 due to his deliberate and reprehensible actions.
The court found several examples of reprehensible conduct in the failure of the trustee to properly administer the estate. In addition to denying the children their rightful inheritance from the estate, the trustee also prevented them from attending funeral celebrations and refused a request for meaningful mementos. The trustees conduct in relation to the estate limited the children’s postsecondary opportunities. The trustee not only grossly mismanaged the estate but also completely ignored court orders.
In Zhang v Zhang 2022 BCSC 2156 an award of $100,000 was made against a fiduciary who secretly traded shares held in trust for a beneficiary and failed to account to the beneficiary for the proceeds of sale.
In 6071376 Canada Inc. v . 3966305 Canada Inc.2019 ONSC 3947 an award of $200,000 for punitive damages was made against a defendant who induced a group of investors to invest in the purchase of a property, which he then secretly sold without their knowledge. The court found that the defendant lied to the plaintiffs, and covered up the sale for more than six years.
In Schwab Estate v Warriner (2023) BCSC 220 , a woman purported to be the spouse of a deceased person who died intestate, leaving two children, 11 years and nine years old. The court found that the defendant Warriner was not a spouse and that she wrongfully took possession of $350,000 proceeds from the sale of the deceased home by exercising undue influence on the deceased.
The court held she was a trustee in a fiduciary relationship of the said funds for the children of the deceased. She unfortunately spent the $350,000 for her own profit, benefit and advantage.
The court found that her misconduct was malicious, oppressive and high-handed, to the extent that it offended the court’s sense of decency and awarded $50,000 in punitive damages against her.
The 2025 decision Liebenzeder Estate v McIntyre 2025 BCSC 189 is noteworthy in that the court made the highest estate punitive damages award in British Columbia to date against the administrator of the estate in the amount of $150,000 .
The court stated that an executor or administrator of an estate is in a fiduciary relationship, and as such must act in good faith and for the best interests of all estate beneficiaries. A personal representative must exercise authority to account to beneficiaries, creditors and others to whom at law they have a duty to account.
The defendant MacIntyre repeatedly failed to provide information and documents regarding the estate, deliver estate funds, deal with CRA to release tax information and generally ignored the beneficiaries of the estate for which she was removed as executor, but failed to comply with the court order.
The court found that McIntyre’s conduct was planned and deliberate and continued throughout to court actions commenced against her in her personal capacity and in her capacity as administrator. She failed to participate in the proceedings, made promises that she did not keep, and ignored court orders. She further withdrew more than $1.4 million from the estate accounts when it became clear that she was likely to be removed as the administrator. Funds remained unaccounted for and documents that were ordered to be produced were not.
CONCLUSION
While the general rule that an award of punitive damages remains the exception and not the rule, it is a fact that there is a great deal of reprehensible conduct that regularly occurs in many estate litigation disputes. Most often the offending party is punished by an award of special costs against him or her.
However it is clear that a trend has emerged in the courts in the last 15 to 20 years. Where there is a greater willingness of the courts to award punitive damages where the misconduct is malicious, oppressive, high-handed, planned and deliberate and over a period of time.
Recent awards of significant amounts have been made against estate defendants who abuse the court’s process, or breach fiduciary duties. The more reprehensible conduct, the higher the award. Mulligan v. Stephenson 2016 BCSC 1941 at paragraph 140.
As such, practitioners in the area of estate litigation should seriously consider a claim of punitive damages where the misconduct in the estate is so egregious as to offend the decency of the court. Until recently claims for punitive damages were largely not taken seriously as it was unlikely that they would be awarded.
Courts have shown that this is no longer the case.
