If a third party wrongfully interferes with an estate asset that has sentimental value, leaving the estate with an unrecognizable version of that asset, a question that may arise is whether the estate is entitled to recover the market value of the asset in order to replace it, or whether the estate is instead entitled to have the actual asset restored to good condition. At first glance, it may seem like the cost of replacing versus restoring estate property is essentially the same; however, the outcome in Kew Estate v Konarski, 2025 ONCA 357 demonstrates that the cost of restoration can far exceed the cost of replacement, depending on the asset.
In Kew Estate, a friend of the deceased agreed to store four vintage cars that belonged to the estate, including the deceased’s most prized possession – a vintage 1960 Corvette convertible. The car had been so significant to the deceased that his family had images of the Corvette engraved on his headstone. After the cars were in the friend’s possession, he used an “elaborate ruse” to register mechanic’s liens against them and transfer ownership of the cars, including the Corvette, to himself. He then stripped the Corvette for parts.
A representative of the estate eventually demanded the return of the cars and subsequently sued the deceased’s friend. In Kew v. Konarski, 2020 ONSC 4677, the Superior Court of Justice held that the defendant friend had committed the tort of conversion, and ordered the return of the vehicles to the estate. Because the Corvette had been parted out, leaving only the fibreglass body and a few ancillary pieces, Justice Leach eventually ordered a continuation of the trial to assess damages. In Kew v. Konarski, 2024 ONSC 3553, the court awarded damages for the cost of restoring the Corvette, rather than replacing it, in light of the uniqueness of the car, particularly its “extraordinarily high subjective value”. When determining what damages to award, Justice Leach was aware that the cost of restoring the Corvette would greatly exceed the cost of replacing it, but found that damages premised on restoration was fair on two bases – the vehicle’s “extraordinary sentimental value”, and the financial benefit that the defendant received from stripping the car for parts in light of the lucrative market for vintage Corvette parts. On this basis, damages premised on the replacement cost of the car would have been unfair, as they would have left the defendant with a windfall.
The defendant appealed Justice Leach’s decision on damages, arguing that damages could only be assessed based on the cost of replacing the Corvette as of the date of the conversion, citing 2105582 Ontario Ltd. (Performance Plus Golf Academy) v. 375445 Ontario Limited (Hydeaway Golf Club), 2017 ONCA 980. This argument was dismissed; the Court of Appeal affirmed that damages are not categorically limited to the market value of an asset as of the date of conversion, and that damages may be ordered based upon the cost of restoring the asset.
The Court of Appeal also dismissed the defendant’s argument that the original damages award was unfair, disproportionate and contrary to public policy for overcompensating the estate. The Court of Appeal confirmed that Justice Leach “appropriately identified the factors needed to guide the assessment of damages” and determine whether to order restoration or replacement of the Corvette. The relevant factors are:
- 1. the uniqueness of the property;
- 2. the availability of a replacement;
- 3. the size of the difference between the cost of repair and the cost of replacement;
- 4. the plaintiff’s interest in having the property repaired; and
- 5. the benefits of repair to the plaintiff weighed against the burden imposed on the defendant of having to pay the higher quantum.
The fact that the estate had sold the body of the Corvette and its remaining parts following the original trial, without taking any steps to restore the car, also did not merit appellate relief. The Court of Appeal refused to admit fresh evidence of what had happened to the Corvette following the trial since the evidence would not have affected the outcome. At the time of trial, the estate’s intention to repair the Corvette was genuine. The Court of Appeal also acknowledged that “[c]ircumstances, including financial priorities, can change. It is not insignificant in this regard that as of the date the Corvette is said to have been sold the estate had not received the damages ordered by the trial judge to fund the restoration.”
Lastly, the defendant appealed the award of $15,000 in aggravated damages intended to compensate the estate for the infliction of property damage through “a deliberate, calculated, and clandestine abuse of a special position of trust, at a time when the estate’s representative and beneficiaries were in a situation of profound vulnerability.” While the estate did not claim aggravated damages, and abandoned a claim for punitive damages prior to trial, Justice Leach held that aggravated damages could be awarded under the general category of “damages suffered by the Plaintiff as a result of conversion”. This ground of appeal was also dismissed, with the court of Appeal affirming that aggravated damages may be awarded where “the reprehensible or outrageous nature of the defendant’s conduct causes additional psychological injury, or harm to the plaintiff’s feelings”. The Court also held that Justice Leach did not err in considering the emotional distress that the defendant’s conduct had caused to the estate beneficiaries, noting that “[t]o conclude otherwise [would mean] that aggravated damages could never be awarded to an estate litigant”.
The Court’s decision in this case demonstrates the danger of interfering with estate assets that have sentimental value. Not only may such conduct result in a damages award premised on the cost of restoring, rather than replacing, the asset, but it may also result in further damages, such as aggravated damages.
Thank you for reading, and have a great day!
Suzana.