Court File and Parties

COURT FILE NO.: CV-17-3356-00ES DATE: 2019 03 04

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BRIAN BLANKS W. Jackson, Counsel for the Plaintiff Plaintiff

• and -

CAROL ELIZABETH ROBERTS Self-Represented Defendant

HEARD: February 28th, 2019

Reasons for Decision

LEMAY J

[1] I am case managing this estates matter. It involves the estate of the late Terrence Blanks. I provided the parties with directions in reasons reported at 2018 ONSC 7699. As part of those directions, the parties were to return before me for a further case management conference so that we could identify the outstanding issues and I could provide further directions on those issues.

[2] In my last decision I set out a series of issues that I understood required resolution. In addition, the parties were invited to make submissions on what else, if anything, needed to be resolved. Based on all of that, and the submissions of the parties on Thursday, the following issues need to be determined:

a) Whether either of the existing trustees should be removed as an Estate Trustee, and whether the Court should appoint an independent supervisor. b) What should be done about the Rolex watch and the ring that remain estate property? c) What should be done about Mr. Mackenzie’s account? Mr. Mackenzie is the lawyer who has the trust funds from the sale of the late Terrence Blanks’ home. d) What should be done with the claims for the debts, trustee compensation and occupation rent? e) Should any payments be made out of the trust account as interim disbursements?

[3] I will deal with each of these issues in turn.

Issue #1 - Estate Trustees

[4] After some discussion with the parties, both sides agreed with my view that the value of the estate did not justify the appointment of an independent estate trustee. Both sides further agreed that I should provide the directions necessary to continue to manage this action. This decision will provide most of those directions.

Issue #2 - What Should be Done With the Chattels?

[5] In addition to the cash sitting in Mr. Mackenzie’s trust account, the Estate owns a Rolex watch and a ring. The parties cannot agree on what should be done with these chattels. There was a suggestion from Ms. Roberts that Mr. Blanks could obtain a valuation of the Rolex watch if he wished to do so. Ms. Roberts also suggested that a “shot-gun” offer be made by one side or the other for the Rolex watch.

[6] Having considered the position of the parties, I am not persuaded that a further appraisal at this point would be either useful or cost-effective. However, I do understand that the parties may have a sentimental attachment to these items. As a result, I am going to give the parties the option to bid on these items before putting them up for public auction.

[7] Each side may provide a sealed bid for either of the items at 1:00 pm on March 8th, 2019. These bids will be provided in Court and on the record, and I will open the bids. The parties are required to provide separate bids for each item. The higher bid for each item will be the successful bid.

[8] If no bids are provided by either side, then the items will be auctioned off and I will establish a process to ensure that happens. This will resolve the issues of the Rolex watch and the ring. If the parties are able to resolve the issues relating to the chattels before Friday, then they can advise my judicial assistant, and the appointment will be cancelled.

Issue #3 - Mr. Mackenzie’s Account

[9] As detailed in my previous reasons, Mr. Jerald Mackenzie was involved in this transaction. The proceeds from the sale of the late Terrence Blanks’ house remain in Mr. Mackenzie’s trust account. There are three issues that arise with respect to this money, as follows:

a) Whether an account that Mr. Mackenzie rendered, in the sum of $5000.00 more or less is an estate expense or Ms. Roberts’ personal expense? b) Whether Mr. Mackenzie should be required to disclose the contents of his files on this matter? If so, how should that disclosure be managed? c) What should be done with the money in Mr. Mackenzie’s trust account in the interim?

[10] I will deal with each issue in turn.

a) Mr. Mackenzie’s Account

[11] There have been different positions taken by the parties over the years about whether Mr. Mackenzie’s account is properly an expense of the Estate or if it is properly an expense of Ms. Roberts personally. In addition, there is an issue over whether the quantum of the account is excessive.

[12] Originally, Ms. Roberts argued that this account was the responsibility of the estate. However, last Thursday she stated that she did not want to commit to this position without having the opportunity to review Mr. Mackenzie’s file first.

[13] As a result, I am prepared to defer any consideration of what should be done about Mr. Mackenzie’s account until Ms. Roberts has confirmed her position as to whether it is a matter that should be paid by the Estate or whether it is her responsibility to pay this account. This brings me to the issue of the production of Mr. Mackenzie’s file.

b) Production of Mr. Mackenzie’s File

[14] It is possible that either the Estate, or Ms. Roberts, or both, are Mr. Mackenzie’s clients. As a result, it is also possible that Mr. Mackenzie has an obligation to produce this file to his clients and, if the client is the Estate, to the Court.

[15] However, there are three points that I am mindful of in making any Orders on this issue. First, Mr. Mackenzie has the right to be heard before any Orders are made regarding production. Second, if Ms. Roberts was the client (and the only client) then Mr. Mackenzie’s file is privileged between him and Ms. Roberts. Finally, the management of this issue in the Estate proceeding needs to be proportionate to the value of the account.

[16] Based on those considerations, and after hearing from the parties, I ordered as follows:

a) A copy of this endorsement is to be served on Mr. Mackenzie forthwith by counsel for Mr. Blanks. b) Ms. Roberts is to serve and file a notice of motion as well as an Affidavit outlining what she is seeking from Mr. Mackenzie and why. Although I did not indicate this to the parties, that Affidavit is to be one complete document, and is not to cross-reference other Affidavits in this proceeding. c) Service of the Affidavit described in paragraph b is to be done on Mr. Jackson and on Mr. Mackenzie by March 15th, 2019. d) The parties, and Mr. Mackenzie, are to contact my judicial assistant at sara.stafford@ontario.ca by March 15th, 2019 to confirm whether they are available for a one hour appearance at 9:00 am sometime during the week of April 15th, 2019. e) Any responding materials from either Mr. Mackenzie or from Mr. Jackson, on behalf of Mr. Blanks, are to be served and filed by April 5th, 2019. Again, any Affidavits provided are to be stand-alone Affidavits. f) Whatever I order to be disclosed from Mr. Mackenzie’s file will be provided first to Ms. Roberts. She will have twenty (20) days from the receipt of the completed disclosure to provide the disclosure to Mr. Jackson, on behalf of Mr. Blanks. If Ms. Roberts does not provide the complete disclosure to Mr. Jackson in that time period, then I will conclude that at least part of the account is her personal responsibility. If Ms. Roberts does not provide any of the disclosure to Mr. Jackson in the twenty (20) day time period, then I will conclude that none of this account is the Estate’s responsibility. g) Those portions of Mr. Mackenzie’s account that are not the Estate’s responsibility will not be the subject of any further evidence, discussion or decisions in this case.

[17] Further Orders will be made once I have provided everyone with an interest in this disclosure request the opportunity to be heard.

[18] I should also address one issue on this point. During the course of submissions, Ms. Roberts sought to file additional documentation relating to her disability in support of her position that she was entitled to look at the documents from Mr. Mackenzie before anyone else so that she could understand the scope of the relationship between her and Mr. Mackenzie. The basis for this request was so that Ms. Roberts could provide an explanation as to why she should have a chance to look at the documents before anyone else. Given the remedy I have fashioned above, I determined that receiving this information was not necessary.

c) The Funds in Mr. Mackenzie’s Trust Account

[19] The parties agree that the amount that should be in Mr. Mackenzie’s trust account is $568,723.39, less the amounts that were paid to Amber Roberts pursuant to my judgment of December 21st, 2018. That amount was a total of $15,716.71. As a result, Mr. Mackenzie’s trust account should have $553,006.68 in it.

[20] The parties have agreed that I will provide the remaining directions on this case, outside of any trials of an issue. Therefore, I have determined that this money should be paid to the accountant of the Superior Court of Justice forthwith unless Mr. Mackenzie either disputes the amount that should be in his trust account or has another reason for disputing the payment of funds into Court. If Mr. Mackenzie disputes the payment of these amounts, he is free to serve a record outlining his dispute on all of the other parties by March 22nd, 2019 and file it with the Court office. That record will be considered at the appearance scheduled for the week of April 15th, 2019.

[21] I should briefly deal with one point that consumed considerable Court time on Thursday last week. Ms. Roberts is extremely interested in obtaining Mr. Mackenzie’s complete, original Trust ledger. I am not persuaded that this document is necessary to the issues that I have to determine for several reasons.

[22] First, if the funds in Mr. Mackenzie’s trust account are the same amount as the parties are expecting to have paid out, then I do not see how the Estate has suffered any loss. As I understand it, the interest on money held in a lawyer’s trust account does not accrue to the benefit of the clients. Instead, it accrues to the benefit of the Law Society. Further, in this case, until the monies owing to Amber Roberts were Ordered to be paid out, the parties did not provide Mr. Mackenzie with any directions to move the trust funds.

[23] Second, even if Mr. Mackenzie has improperly removed these trust funds from his account, I do not see how this Court has jurisdiction to fashion a remedy. Unless I have missed some principle, any claim that these trust funds were managed improperly is a matter for the Law Society of Ontario, and not for the Courts. I hasten to add two points on this matter. First, a final determination of this question will have to await the production request. Second, I have no evidence that Mr. Mackenzie has done anything improper in this case, and nothing in my reasons should be taken as supporting such a conclusion.

Issue #4 - What Should be Done With the Other Claims?

[24] The other claims that remain to be determined in this matter are as follows:

a) Each party claims that the other party owes the Estate a debt. b) Ms. Roberts claims Trustee Compensation. c) Mr. Blanks advances a claim for Occupation Rent as a set-off against Ms. Roberts’ claim for Trustee Compensation. d) Ms. Roberts raises the issue of a T-1079 as a bar to the claim for occupation rent.

[25] In my view, these issues require particulars, production, and then a three to five day trial of an issue before one of my colleagues. There was some considerable discussion of the timetable last Thursday and I have reviewed the transcript of my discussion with the parties. For clarity, if there are any differences between what was said in Court about timelines and what is in this decision, it is this decision that governs.

[26] To address the particulars and production issues, I am directing as follows:

a) Within forty-five (45) days of today’s date, each party shall provide particulars of the debt that they say the other party owes the Estate. b) Within forty-five (45) days of receiving the particulars in paragraph (a), the parties shall provide any responding particulars. This issue was not discussed with the parties in Court but, on review of the transcript and my notes, I am of the view that it is a necessary step. c) Within forty-five (45) days of today’s date, Ms. Roberts is to provide particulars of her claim for Trustee Compensation. Those particulars must indicate the amount of time spent, the date that the time was spent on, the nature of the activity, the hourly rate that is claimed for the activity and the basis for the hourly rate. d) Subject to paragraphs e and f, within forty-five (45) days of today’s date, the parties shall produce all relevant documents in their possession relating to the outstanding issues that have not already been produced. e) Within ninety (90) days of today’s date, Mr. Blanks is to provide the documentation and particulars, including any valuation documentation, on his claim for occupation rent. f) Within ninety (90) days of today’s date, Ms. Roberts is to provide her documentation and particulars on the T-1079 issue, including any expert or other legal reports. g) Each party shall have ninety (90) calendar days from the receipt of the reports in paragraph e and f to provide any responding expert reports or particulars.

[27] We will be looking to book a trial of an issue at the appearance in mid-April. All of the production should be completed by mid-September of 2019, so the parties should be prepared to deal with any disclosure motions in the fall of 2019 and be ready for a trial early in 2020.

Issue #5 - Should Interim Disbursements be Made?

[28] The parties are the only two beneficiaries left with an interest in the Estate. They have consented to an interim disbursement in the sum of $25,000.00 to each of them. These amounts are to be paid out of Court forthwith after the trust funds are paid into Court by Mr. Mackenzie.

Conclusion and Costs

[29] For the foregoing reasons, I make the following Orders with respect to Mr. Mackenzie’s files:

a) A copy of this endorsement is to be served on Mr. Mackenzie forthwith by counsel for Mr. Blanks. b) Ms. Roberts is to serve and file a notice of motion as well as an Affidavit outlining what she is seeking from Mr. Mackenzie and why. Although I did not indicate this to the parties, that Affidavit is to be one complete document, and is not to cross-reference other Affidavits in this proceeding. c) Service of the Affidavit described in paragraph b is to be done on Mr. Jackson and on Mr. Mackenzie by March 15th, 2019. d) The parties, and Mr. Mackenzie, are to contact my judicial assistant at sara.stafford@ontario.ca by March 15th, 2019 to confirm whether they are available for a one hour appearance at 9:00 am sometime during the week of April 15th, 2019. e) Any responding materials from either Mr. Mackenzie or from Mr. Jackson, on behalf of Mr. Blanks, are to be served and filed by April 5th, 2019. Again, any Affidavits provided are to be stand-alone Affidavits. f) Whatever I order to be disclosed from Mr. Mackenzie’s file will be provided first to Ms. Roberts. She will have twenty (20) days from the receipt of the completed disclosure to provide the disclosure to Mr. Jackson, on behalf of Mr. Blanks. If Ms. Roberts does not provide the complete disclosure to Mr. Jackson in that time period, then I will conclude that at least part of the account is her personal responsibility. If Ms. Roberts does not provide any of the disclosure to Mr. Jackson in the twenty (20) day time period, then I will conclude that none of this account is the Estate’s responsibility. g) Those portions of Mr. Mackenzie’s account that are not the Estate’s responsibility will not be the subject of any further evidence, discussion or decisions in this case.

[30] I make the following Orders with respect to the procedure for preparing for the trial of issues in this case:

a) Within forty-five (45) days of today’s date, each party shall provide particulars of the debt that they say the other party owes the Estate. b) Within forty-five (45) days of receiving the particulars in paragraph (a), the parties shall provide any responding particulars. This issue was not discussed with the parties in Court but, on review of the transcript and my notes, I am of the view that it is a necessary step. c) Within forty-five (45) days of today’s date, Ms. Roberts is to provide particulars of her claim for Trustee Compensation. Those particulars must indicate the amount of time spent, the date that the time was spent on, the nature of the activity, the hourly rate that is claimed for the activity and the basis for the hourly rate. d) Subject to paragraphs e and f, within forty-five (45) days of today’s date, the parties shall produce all relevant documents in their possession relating to the outstanding issues that have not already been produced. e) Within ninety (90) days of today’s date, Mr. Blanks is to provide the documentation and particulars, including any valuation documentation, on his claim for occupation rent. f) Within ninety (90) days of today’s date, Ms. Roberts is to provide her documentation and particulars on the T-1079 issue, including any expert or other legal reports. g) Each party shall have ninety (90) calendar days from the receipt of the reports in paragraph e and f to provide any responding expert reports or particulars.

[31] Finally, I make the following other Orders:

a) Unless challenging the payment of monies into Court, Mr. Mackenzie is to pay the sum of $553,006.68 from his trust account into Court to the credit of this matter forthwith. b) From the sum paid into Court in paragraph (a), each of Mr. Blanks and Ms. Roberts is entitled to be paid the sum of $25,000.00 forthwith. The remainder of the money will be held in trust pending further Orders from me. c) If Mr. Mackenzie is challenging the payment of monies into Court, he is to advise of that fact and provide an Affidavit outlining the reasons for his challenge by no later than March 22nd, 2019.

[32] I am not yet prepared to fix costs for this appearance, but I retain the jurisdiction to do so once this matter is completed. I also retain the jurisdiction to fix costs for the previous appearances as set out in paragraph 142 of my December 21st, 2018 reasons.

LEMAY J Released: March 4, 2019