Court of Appeal for Ontario

Date: 2025-05-09
Docket: COA-24-CV-0783

Panel: Miller, Trotter and Copeland JJ.A.

Between:
Charlene Marie Kew, Estate Trustee during litigation for the Estate of Robert Thomas Kew, deceased (Plaintiff/Respondent)
and
Steve Konarski (Defendant/Appellant)

Appearances:
Dennis G. Crawford, for the appellant
Jane E. Scholes and Debbie Boswell, for the respondent

Heard: 2025-03-05

On appeal from the judgment of Justice Ian F. Leach of the Superior Court of Justice, dated June 20, 2024, with reasons reported at 2024 ONSC 3553.

B.W. Miller J.A.:

Background

[1] Mr. Konarski was a trusted friend to the Kew family. When Mr. Kew died unexpectedly and his collection of vintage cars was thought to be in immediate danger of vandalism and theft, Mr. Kew’s ex-wife enlisted Mr. Konarski’s help. Mr. Konarski immediately arranged to move four of Mr. Kew’s vehicles out of harm’s way and to safekeeping at his property. One of the vehicles was Mr. Kew’s prized possession: a vintage 1960 Corvette convertible.

[2] Mr. Konarski revealed himself to be something less than a friend, surreptitiously transferring ownership of the Corvette to himself and then stripping it, likely to supply the lucrative market for vintage Corvette parts.

[3] The Corvette had great significance for Mr. Kew. He maintained it himself, exhibited it at vintage car shows, and it won him several awards. It had featured prominently in family life and Mr. Kew’s son in particular had fond memories of the excitement it would create when his father would drive him to school. Because it had great significance to Mr. Kew, it had great significance to his family, especially after his death. To honour Mr. Kew, the family had images of the Corvette engraved on his headstone.

[4] Once Mr. Konarski had taken possession of the vehicles he engaged in an elaborate ruse to register mechanic’s liens against them and, unknown to the Kew family, fraudulently transfer title to the vehicles to himself. After Mr. Konarski’s actions became known and the estate demanded return of the vehicles, he refused. Ms. Kew, acting as litigation guardian for the estate, commenced an action to obtain an order for the return of the vehicles, and in the alternative, damages.

[5] Mr. Konarski was found liable for the torts of conversion and detinue and was ordered to return the vehicles to the estate. The trial judge could not rule on whether to award damages – or in what quantum – as the vehicles could not be inspected until they were secured from Mr. Konarski. The parties agreed at trial that if the trial judge ordered the return of the vehicles, the trial judge would direct a reference to have an expert quantify damages.

[6] Of the four vehicles that were returned pursuant to court order, three were more or less in the same condition as when they had been taken. The estate withdrew the claim for damages with respect to those vehicles. The Corvette, however, had been parted out and all that remained was the fibreglass body and a few ancillary pieces. The body had been extensively damaged, likely in the process of stripping the vehicle of marketable parts.

[7] The reference process was intended to be an efficient means of determining fair compensation for the damage done by Mr. Konarski. As explained below, it was not, and caused significant delay and expense.

[8] The referee was to determine “the monetary compensation … which the plaintiff should receive from the defendant for damages inflicted on vehicles or parts, or other diminution in value of such vehicles or parts because of the defendant’s action or inaction, during the period in which the vehicles or parts were in the defendant’s possession.” As part of this inquiry, the referee was to make findings as to the condition and value of the Corvette when Mr. Konarski took possession of it, its condition when he returned it and whether particular parts were missing, and the cost of repairing or restoring it to the condition it was in when Mr. Konarski took possession. The trial judge directed the referee to provide the report to him for confirmation under r. 54.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[9] The referee did not report to the trial judge as directed. Two years later and one year after the referee released his report to the parties, counsel for the parties wrote to the trial judge inquiring about when they could expect the “final decision”. It came to light that although the referee had provided the report to the parties, no one had thought to provide it to the judge.

[10] Having then received and reviewed the referee’s report, the trial judge found the reasons inadequate. The referee did not answer questions he was directed to answer and did not provide adequate reasoning or justification for the questions he purported to answer. The referee was directed to provide supplemental reasons. He did so.

[11] Ultimately, the referee found that the Corvette would have had a market value of $60,000 when Mr. Konarski took possession of it. The referee would have awarded the estate that amount as damages, less a deduction of $10,000 for parts that the referee mistakenly believed had been retained by the estate and not provided to Mr. Konarski, for a net award of $50,000.

[12] The trial judge convened a case conference. The appellant took the position that the trial judge ought to confirm the referee’s report and supplemental report. The trial judge refused, and found instead that the referee exceeded his jurisdiction, failed to answer several of the inquiries set by the trial judge, and erred in principle by rejecting cost of repair as a measure of damages without explaining why. The trial judge ordered a continuation of the trial to assess damages.

[13] At the continuation of trial, the trial judge heard testimony from each party’s expert witness, each of whom had also given evidence before the referee. Having rejected the referee’s report the trial judge chose to assess damages de novo.

Legal Principles for Damages

[14] The trial judge worked from the legal principle that damages for tortious interference with property are to be assessed by the diminution in value resulting from the defendant’s tort: Darbishire v. Warran, [1963] 1 W.L.R. 1067, at p. 1077; Lengert et al. v. Gladstone (1970), 11 D.L.R. (3d) 726 (B.C. C.A.), at pp. 727-8. Diminution in value, in turn, is to be assessed by the reasonable cost of the restoration work required to bring the damaged property back to its pre-damaged condition: O’Grady v. Wesminster Scaffolding Ltd., [1962] 2 Lloyd’s Rep 238 (Q.B.).

The trial judge noted that where the cost of restoration exceeds the cost of replacement, courts will sometimes limit damages payable to the cost of replacement, but are not invariably required to do so. There are circumstances where courts can award repair costs even when they exceed the cost of replacement. That analysis is guided by factors such as:

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.

(Elizabeth Adjin-Tettey, “Measurement of Damages for Interference with Property Interests in Torts and Contracts” (2003) 26 Advoc. Q. 391, at p. 395)

Application of the Factors

[15] The trial judge found that each of the above factors weighed in favour of awarding the estate the cost of restoration of the Corvette:

1. Uniqueness: The 1960 Corvette is a rare collector’s item. There are few remaining, and each would have an idiosyncratic history differentiating it from others. The specific car at issue also has “extraordinarily high subjective value” for the members of Mr. Kew’s family.
2. Availability of replacement: There are few available on the open market. Significantly, not every 1960 Corvette would be an adequate replacement for this particular vehicle. There are variations in models and, importantly, variation in condition. A vehicle that had been damaged, or poorly maintained, or was mechanically defective would not be an adequate substitute, and this could not be ascertained without inspection.
3. The difference between replacement price and restoration cost: The trial judge found that the replacement price was not known. He rejected the referee’s finding that a replacement vehicle could be purchased for $60,000, on the basis of the evidence of the respondent’s expert that such a vehicle would not be a true replacement, and the cost of inspection and necessary repairs and upgrades would drive the price significantly higher. The trial judge noted that the restoration cost would be much higher than what the appellant was putting forward as the cost of replacement.
4. Interest in repairing: The trial judge found the respondent’s interest in restoring the Corvette to be genuine – that the estate trustee and beneficiaries had a sincere desire to preserve the Corvette for personal use, and had demonstrated their bona fides by having inspections and preparatory work done.
5. Balancing: The trial judge was aware that there was a risk of overcompensation as a result of the respondent having the vehicle restored to a condition substantially better than it was when it was converted by the appellant. He also found that the cost of restoration would greatly exceed the cost of comparable vehicles put forward by the appellant. However, he was content that there would be no unfairness in ordering damages on the basis of restoration cost for two reasons. First, he noted the extraordinary sentimental value the vehicle had to the faultless respondent. Second, the financial burden of restoration is caused in large part by the cost of replacement parts, which are expensive because they are rare. It is this price dynamic that created the incentive for the appellant to part out the car in the first place. The trial judge found that the financial benefit the appellant likely received from his actions would likely offset an award of damages made on the basis of restoration costs. Conversely, to award damages on the lesser basis of replacement cost could leave the appellant with a windfall. Regardless, the trial judge accepted the evidence of the respondent’s expert that the starting point for a truly comparable vehicle and the likely costs of inspection and repair would bring the cost of replacement close to the cost of restoration.

[16] The trial judge thus concluded that damages ought to be assessed on a restoration basis, which he calculated as $236,712.40 inclusive of HST. The calculation was based on an estimated $128,480 in replacement parts and 800 hours of labour at $100 per hour.

[17] The expert estimated the value of the fibreglass shell and returned parts to be $15,000.

[18] The trial judge found that the Estate was entitled to aggravated damages in the amount of $15,000, as compensation for the appellant having inflicted the 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.”

[19] The trial judge’s conclusion on compensatory damages was that the estate was entitled to a net amount of $243,192.20, consisting of $228,192.20 in property damage to the Corvette, and $15,000 aggravated damages. That global amount was reduced to $200,000 to conform with the upper limit of damages claimed by the appellant’s pleadings. Of this amount, the trial judge allocated $187,660.00 for damage to the Corvette and $12,340.00 for aggravated damages.

[20] The respondent was awarded costs in the amount of $155,000.00.

Issues on Appeal

[21] The appellant argued that the trial judge made five errors in his assessment of damages:

1. The trial judge placed insufficient weight on the respondent’s failure to have the Corvette restored to driving condition;
2. The trial judge failed to follow binding authority that provides that goods that have been converted are to be valued as at the date of conversion;
3. The award of damages was disproportionate;
4. The award of damages was contrary to public policy; and
5. The award for aggravated damages was a re-categorization of an award for punitive damages.

[22] The appellant also sought leave to appeal the trial judge’s award of costs.

Analysis

[23] For the reasons given below, I would dismiss the appeal.

[24] I do not address the appellant’s argument on the alleged disproportionality of the damages awarded as it was framed this way for the first time on appeal, and in any event, is duplicative of the other arguments advanced against awarding cost of restoration.

(1) The Estate’s Failure to Restore the Corvette

[25] The appellant argued that it was significant that, over the lengthy period of time over which the trial took place, restoration work on the Corvette was never begun. The trial judge erred, the appellant argued, in finding that the respondent’s interest in having the Corvette restored was genuine, and in attaching this factor significant weight in the analysis of whether damages ought to be granted on a cost of restoration basis instead of replacement cost. The appellant added that this conclusion was strengthened on appeal by the consideration of fresh evidence, which would establish that the estate subsequently sold the Corvette body and remaining parts without undertaking any steps to repair.

[26] I would not admit the fresh evidence, for the reason that the evidence could not have affected the result: Palmer v. The Queen, [1980] 1 S.C.R. 759, at p. 775. Litigation is intended to dispose of disputes with finality. The trial judge assessed the respondent’s intention as of the time of trial, which is the only relevant time period: Barendregt v. Grebliunas, 2022 SCC 22, [2022] 1 S.C.R. 517, at para. 77; Maceroni v. Maceroni, 2024 ONCA 824, at para. 12. The trial judge concluded that, as at that time, the respondent’s intention to repair was genuine. This conclusion was supported by the evidence that the estate had located a skilled contractor able and willing to carry out repairs, conducted a detailed preparatory investigation, and obtained an estimate of the cost of repair. The trial judge was impressed that the Corvette had great sentimental value to Mr. Kew’s children and ex-wife. The fact that the estate later sold the Corvette in an unrestored state would not lead inexorably to the conclusion that the intention to restore the Corvette was never genuine. Circumstances, 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.

[27] Apart from an inference that the appellant invites this court to draw from the unadmitted fresh evidence, the appellant does not advance a sufficient argument to set aside the finding of the trial judge that the estate had a bona fide intention to repair the Corvette at the time of trial, and that this intention to repair supported the awarding of damages on a cost of restoration basis.

(2) Failure to Follow Binding Authority that Damages to Be Assessed on a Cost of Replacement Basis

[28] The appellant argued that the trial judge failed to follow this court’s decision in 2105582 Ontario Ltd. (Performance Plus Golf Academy) v. 375445 Ontario Limited (Hydeaway Golf Club), 2017 ONCA 980, 138 O.R. (3d) 562, at para. 61, which specified that in a claim for conversion, the value of a chattel that has been converted is to be assessed as of the date of conversion: “a tortfeasor will be forced to purchase the converted asset from the plaintiff. The general measure of damages is the market value of the converted asset as of the date of conversion.”

[29] Performance Plus Golf Academy, and the cases it cites, do not speak to the situation that confronted the trial judge, does not preclude an award of damages in addition to the return of goods, and does not establish a categorical rule limiting damages to the market value at date of conversion. Unsurprisingly, Performance Plus Golf Academy was not put to the trial judge. The framing of the claim by the respondent was for a return of all goods and, in addition, for damages to compensate for any damage done to the vehicles while in the appellant’s possession. As of the first phase of the trial, the extent of the appellant’s wrongdoing was not known, but it was anticipated at that time that a return of the vehicles would not be sufficient to put the respondent into the position it would have been in but for the wrongdoing, and this necessitated the initial reference on damages, and then the second phase of the trial.

[30] I do not agree that the trial judge was restricted by binding precedent to limit damages to the market value of the Corvette at the time of conversion.

(3) The Trial Judge’s Award of Damages is Unfair, Disproportionate, and Contrary to Public Policy

[31] The appellant’s main argument – formulated in various ways – is that the award of damages is unfair and overcompensates the respondent. The appellant argues there is no reason – but for the overinflated sentimental value that the trial judge assigned to the Corvette – to order damages for the restoration cost of the Corvette when the purchase of another car at less than a third of the cost would compensate the respondent just as well.

[32] The trial judge, in my view, appropriately identified the factors needed to guide the assessment of damages, and particularly whether to order restoration rather than replacement, in the context of wrongly detained property that has been returned in a damaged state. These considerations 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.

[33] The appellant focusses his submission, as he did at trial, on the proposition that the burden imposed on him is disproportionate to the benefit conferred on the respondent. But this submission founders on the trial judge’s factual findings. He did not accept the appellant’s submission – supported by the appellant’s expert – that the replacement cost of a comparable vehicle would be $60,000. He expressly accepted the evidence of the respondent’s expert that the “starting point” for a comparable vehicle would be $100,000, and even at that price point “we absolutely don’t know what the car’s gonna be like” without taking the engine, transmission, back end, brakes and electrical apart, to “go through everything”. The respondent’s expert emphasized – and the trial judge accepted – that one would “have no idea” what problems and complications may be encountered, and that addressing such issues is “where the money comes in”. Once the replacement vehicle was obtained and taken apart, with its components inspected and checked, and further necessary repairs and reassembly completed, a further $50,000 to $100,000 would be required. As the trial judge noted, this brought the replacement cost very close to the restoration cost quoted by the respondent’s expert, deflating the argument that the cost of restoration is disproportionate to the replacement cost.

[34] It is worth considering the main driver of the cost of restoration (as well as the probable cost of obtaining a truly comparable vehicle). Collectors who own 1960s Corvettes want to keep them in good repair. That requires an on-going supply of parts. Original parts are no longer manufactured, and the existing stock is dwindling. This scarcity results in high prices, to the extent that the cost of sourcing parts to replace the parts taken by Mr. Konarski was estimated by the respondent’s expert to be over $128,480.[^1] The value of the sum of the parts would appear to be greater than the whole. This, undoubtedly, is the reason that Mr. Konarski parted the car out in the first place.[^2] He would have been motivated by, and likely profited from, the same market dynamic that produces what he now claims to be a disproportionate award. In reality, it is a just measure of damages.

[35] The trial judge was alive to the possibility that the award he made could result in overcompensation to the respondent, as the quality of a professional restoration would likely exceed the quality of the work that Mr. Kew had done himself. There may well be betterment. But the trial judge found that it was appropriate, given Mr. Konarski’s conduct, that he bear that risk and that “the plaintiff certainly should not be obliged to bear the risk of under-compensation.” I agree. Where the extent of the betterment is unproven and in doubt, the law favours the faultless plaintiff and not the defendant who sought to profit substantially by taking and selling the plaintiff’s property.

(4) The Award for Aggravated Damages Was Improper

[36] The respondent made the decision to abandon a claim for punitive damages prior to trial, and it did not expressly claim aggravated damages. The appellant argues that in awarding aggravated damages, the trial judge was circumventing this strategic decision and effectively awarding punitive damages in order to denounce and punish the appellant. The appellant also takes issue with the trial judge accepting that the feelings of Mr. Kew’s children were relevant to the analysis, contending they were not parties to the action.

[37] The trial judge was alive to the fact that a claim for aggravated damages was not specifically pleaded but found that such damages fell under the general category of “damages suffered by the Plaintiff as a result of the conversion”, which was pleaded. He concluded that the appellant would not have been taken by surprise by an award for feelings of betrayal and hurt inflicted upon the estate, more particularly towards Ms. Kew as the estate administrator and Mr. Kew’s children as the estate’s two primary estate beneficiaries.

[38] Aggravated damages are awarded where “the reprehensible or outrageous nature of the defendant’s conduct causes a loss of dignity, humiliation, additional psychological injury, or harm to the plaintiff's feelings”: McIntyre v. Grigg, 83 O.R. (3d) 161 (C.A.), at paras. 50-51. A claimant need not specifically plead them so long as the defendant is not taken by surprise: Lewis N. Klar et al., Remedies in Tort (Toronto: Thomson Reuters, 2021), at § 30:9; Tom v. Truong, 2002 BCSC 643, at para. 107, aff’d 2003 BCCA 387, 16 B.C.L.R. (4th) 72. The trial judge determined that an award for aggravated damages was appropriate in this case because it would compensate for the hurt feelings experienced by the estate beneficiaries as a result of the appellant’s abuse of a special position of trust when Ms. Kew and Mr. Kew’s children were in a state of vulnerability, which would have been prolonged by this litigation.

[39] I do not agree that the trial judge improperly substituted aggravated damages for punitive damages. Aggravated damages may and often does cover conduct that could also be subject to punitive damages: Vorvis v. Insurance Corp. of British Columbia, [1989] 1 S.C.R. 1085, at p. 1099. Neither is there any other basis to set the award aside. The reprehensible nature of the appellant’s conduct was front and centre in the litigation as was its impact on Mr. Kew’s family. The appellant could not have been taken by surprise. Furthermore, although the party to the litigation is the estate of Mr. Kew, the trial judge did not err in considering the emotional distress that the appellant caused to the estate beneficiaries. To conclude otherwise would mean that aggravated damages could never be awarded to an estate litigant. This court was not provided with any authority in support of such a proposition.

Disposition

[40] The motion for leave to introduce fresh evidence is dismissed. The appeal is dismissed. Leave to appeal costs is dismissed. The respondent is entitled to costs of the appeal in the amount of $30,000, all inclusive.

Released: May 9, 2025

“B.W.M.”
“B.W. Miller J.A.”
“I agree. Gary Trotter J.A.”
“I agree. J. Copeland J.A.”

[^1]: The number of missing parts enumerated by the respondent’s expert is substantial: “the vehicle’s lights and light assemblies, (front and rear), light trim rings, chrome fittings, bumpers, bumperettes, body bows and brackets, frame/chassis, engine, transmission, four-speed shifter, radiator, radiator shroud and fan, thermostat, aluminum bell housing for the clutch and pressure plates, clutch fan, generator, front grill, door windows, window channel posts and anchors, window mechanics, (apart from a couple of remaining pieces), reinforcement brackets, radio aerial, gas tank, door panels, electrical wiring and seats.”

[^2]: The trial judge rejected Mr. Konarski’s protestations of not knowing what happened to the Corvette or its parts as “brazen lies”.