Damages For Breach of Trust

Damages in Equity for Breach of Trust

Huff v Price 1990 (BCCA) 51 BCLR 282 held that the amount of damages in equity  in an action for breach of trust will be equal to the highest price at which the property of which that person was deprived could have been sold in the period before the breach of duty was discovered.

It is no defence, where there has been a breach of trust for the defendant to argue that there would have been a loss that would have occurred in any event, notwithstanding the breach of trust.

Island Realty Investments ltd v Douglas (1985) 56 ETR dismissed an unfaithful trustees argument that a loss in the real estate market would have occurred in any event, despite his breach of trust. The court distinguished the amount of damages that may have followed as a result of a breach of contract and held that in actions for breach of trust, the measure of damages must be the highest price that the property attained during the period of the breach of trust.

These passages of law have been approved by the Supreme Court of Canada in Guerin v. The Queen (1984) 2 SCR 335 that stated ” just as it is to be presumed that a beneficiary would have wished to sell his securities at the highest price available during the period they were wrongfully withheld from him by the trustee, so also it should be presumed that the band would’ve wished to develop its land in the most advantageous way possible. During the period covered by the unauthorized lease.

Mental Suffering

Claiming Damages for Mental Suffering

Even in estate disputes client’s often wish to claim damages for mental suffering caused by other parties. The law relating to such was discussed in the Ontario case of Guschewski v Gushewski 2017 ONSC 4553

In Prinzo v. Baycrest Centre for Geriatric Care, (2002), 60 OR 474 Weiler J.A. stated:

A review of the case-law and the commentator confirms the existence of the tort of the intentional infliction of mental suffering, the elements of which may be summarized as:

(1) flagrant or outrageous conduct;

(2) calculated to produce harm; and

(3) resulting in a visible and provable illness.

51      There is no allegation from Ms. Guschewski that she is suffering from a “visible and provable illness”. The case is similar, in this respect, to B.L. v. Furman, (2011), in which summary judgment was granted dismissing a claim for damages for intentional infliction of mental suffering based on the absence of a pleading of visible and provable illness.

52      The Supreme Court of Canada established the test for claims for damages for mental suffering in Mustapha v. Culligan of Canada Ltd., (2008) 2 SCR 114. McLachlin C.J., speaking for the Court, stated:

[8] Generally, a plaintiff who suffers personal injury will be found to have suffered damage. Damage for purposes of this inquiry includes psychological injury. The distinction between physical and mental injury is elusive and arguably artificial in the context of tort. As Lord Lloyd said in Page v. Smith, [1996] 1 A.C. 155 (H.L.), at p. 188:

In an age when medical knowledge is expanding fast, and psychiatric knowledge with it, it would not be sensible to commit the law to a distinction between physical and psychiatric injury, which may already seem somewhat artificial, and may soon be altogether outmoded. Nothing will be gained by treating them as different “kinds” of personal injury, so as to require the application of different tests in law. [Emphasis added.]

[9] This said, psychological disturbance that rises to the level of personal injury must be distinguished from psychological upset. Personal injury at law connotes serious trauma or illness: see Hinz v. Berry, [1970] 2 Q.B. 40 (C.A.), at p. 42; Page v. Smith, at p. 189; Linden and Feldthusen, at pp. 425-27. The law does not recognize upset, disgust, anxiety, agitation or other mental states that fall short of injury. I would not purport to define compensable injury exhaustively, except to say that it must be serious and prolonged and rise above the ordinary annoyances, anxieties and fears that people living in society routinely, if sometimes reluctantly, accept. The need to accept such upsets rather than seek redress in tort is what I take the Court of Appeal to be expressing in its quote from Vanek v. Great Atlantic & Pacific Co. of Canada (1999), 1999 CanLII 2863 (ON CA), 48 O.R. (3d) 228 (C.A.): “Life goes on” (para. 60). Quite simply, minor and transient upsets do not constitute personal injury, and hence do not amount to damage. [Emphasis added]

53      The Supreme Court recently revisited the test for mental distress claims in Saadati v. Moorhead, (2017) SCC 28, in which the court resisted an effort to extend the reach of Mustapha v. Culligan by requiring evidence of a recognizable mental illness. Brown J. stated:

This Court has, however, never required claimants to show a recognizable psychiatric illness as a precondition to recovery for mental injury. Nor, in my view, would it be desirable for it to do so now. Just as recovery for physical injury is not, as a matter of law, conditioned upon a claimant adducing expert diagnostic evidence in support, recovery for mental injury does not require proof of a recognizable psychiatric illness. This and other mechanisms by which some courts have historically sought to control recovery for mental injury are, in my respectful view, premised upon dubious perceptions of psychiatry and of mental illness in general, which Canadian tort law should repudiate. Further, the elements of the cause of action of negligence, together with the threshold stated by this Court in Mustapha v. Culligan of Canada Ltd., 2008 SCC 27 (CanLII), [2008] 2 S.C.R. 114, at para. 9, for proving mental injury, furnish a sufficiently robust array of protections against unworthy claims. I therefore conclude that a finding of legally compensable mental injury need not rest, in whole or in part, on the claimant proving a recognized psychiatric illness. It follows that I would allow the appeal and restore the trial judge’s award.

Wills Lawyer Liable For Damages to Intended Beneficiary

Wills Lawyer Liable For Damages to Intended Beneficiary

Meier v Rose 2012 CarswellAlta 185 is a good example of a lawyer’s negligence in the preparation of a last will and testament, and the consequent damages awarded by the court against the lawyer in favor of the intended beneficiary who did not inherit.

The testator had given instructions to the solicitor to prepare a will for the next day.

The will was to have the provision specifically bequesting certain lands to the brother of the testator.

The solicitor prepare the will after obtaining the legal description of the property, but without properly ascertaining the ownership of the lands, and in particular, to verify that the deceased did in fact own the lands.

The deceased in fact did not own the lands at the time of his death, as they were owned by his limited company.

Accordingly the gift to the brother failed, and the brother subsequently brought action against the lawyer for negligence.

The action was allowed and damages in the amount of $482,200 were awarded.

The court found that the lawyer owed a duty of care not just to his client the testator, but also to the intended beneficiary of the lands.

The lawyer’s duty of care in carrying out the testator’s instructions in order to effectively confer the intended benefit to the brother, should have included the proper and necessary inquiries into the ownership of the lands, such as a land title search would have indicated.

If the lawyer had not been negligent in failing to ascertain the ownership of the lands, then the gift to the brother would not have failed.

For further reading on this topic please see the disinherited.com article entitled “Disappointed Beneficiary? Sue the Lawyer.