Following the conclusion of a civil action the court may order an unsuccessful party to pay a
financial remedy to a successful party who is deemed to have suffered a wrong. These remedies
are referred to within the legal system as “damages”. Punitive damages refer to a distinct type of
damages which can be granted in specific civil cases. While other forms of damages primarily
aim to restore a wrong done to an injured party, punitive damages serve an additional purpose:
reprimanding the wrongdoer for their misconduct.
Punitive damages are exclusively reserved for cases where the defendant’s actions are regarded
as highly egregious, malicious, or extraordinarily reckless. They are not automatically awarded
in every civil lawsuit, but rather in exceptional circumstances where the defendant’s behavior
necessitates a more robust response from the court. The main goals of punitive damages are to
provide retribution for egregious conduct, to discourage future misconduct, and to condemn the
negative conduct itself.
When Does The Court Order Punitive Damages?
The threshold for punitive damages was set out in a case called Whiten v. Pilot Insurance Co., in
which the court said that punitive damages were reserved for exceptional cases that “offend the
court’s sense of decency”. Therefore, in order for punitive damages to be awarded, the
defendant’s actions must represent a significant departure from the ordinary standards of
acceptable behavior. In determining whether or not to award punitive damages, a case called Le
Soleil Hospitality Inc. v. Louie stated that judges ought to consider, amongst other things, the
a) Whether the misconduct was planned and deliberate;
b) The defendant’s motive and awareness that the misconduct was wrong
c) The period over which the misconduct persisted;
d) Attempts at concealing the misconduct; and
e) Whether the interest violated was deeply personal to the plaintiff or irreplaceable
This means that a party is more likely to incur punitive damages if they intentionally act
maliciously, if they continue to do so over an extended period of time, or if they attempt to
disguise or hide that misconduct from adverse parties or the court.
Mounce v. King 2023 BCCA 184
A recent BC Court of Appeal case clarified the discretionary power that judges have to award
punitive damages, and further defined the level of conduct necessary for such damages to be
awarded. This case, entitled Mounce v. King 2023 BCCA 184, was an appeal of a Supreme Court
of British Columbia case in which the defendant, Mr. Gerald Mounce, was found to have
wrongly extracted money from a business in which the plaintiffs and Mr. Mounce were partners.
The court found that over a period of roughly 10 years Mr. Mounce had knowingly been
inappropriately taking money from the joint business account for his own purposes and had
attempted to conceal his transactions from his partners. At trial Mr. Mounce was deemed by the
courts to be uncooperative, as he had attempted to explain his actions in such a convoluted and
vague manner that the judge found that he was attempting to confuse the opposing parties in
hopes of escaping liability. Using the above factors from Soleil as a basis, the judge ordered Mr.
Mounce to pay punitive damages totalling $50,000.
On appeal, Mr. Mounce argued that his conduct did not rise to a level warranting punitive
damages, and that the trial judge had erred in assigning them. The Court of Appeal found that
because Mr. Mounce had knowingly concealed his inappropriate withdrawals over an extended
period of time that his actions were sufficiently blameworthy to justify issuing punitive damages
on the bases of denunciation and deterrence.
Implications & Takeaway
This case illustrates that the decision to award punitive damages ultimately relies on the judge or
jury’s interpretation of the test, including the factors laid out in Soleil. The characteristics that
cause a defendant’s actions to rise to the level of justifying punitive damages can vary, but courts
are significantly more likely to award them in instances where the defendant either knowingly
acts inappropriately or tries to hide their actions. In order to avoid being ordered to pay such
damages, it is therefore best that any potential defendant refrain from acting in ways that the
court may deem to be malicious, and to avoid making active attempts to conceal any such