Court File and Parties

COURT FILE NO.: CV-17-3356-00ES DATE: 2019 04 16

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BRIAN BLANKS W. Jackson, Counsel for the Plaintiff Plaintiff

- and -

CAROL ELIZABETH ROBERTS Self-Represented Defendant

Mr. Jerald MacKenzie, interested party

HEARD: April 15th, 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 further directions in reasons reported at 2019 ONSC 1446. As part of those directions, the parties returned before me yesterday in order to provide submissions on what should be done with the money held in trust by Mr. MacKenzie.

[2] In my last decision I set out my views on how a number of issues should be resolved. Some of these steps have been completed, although there remain two significant matters. Those matters are the trial of an issue on loans and trustee compensation, and Mr. MacKenzie’s account.

[3] In our appearance yesterday, we did not discuss the date for the trial of an issue on the questions of loans and trustee compensation. I confirm that the time limits set out in my March 4th, 2018 decision remain in force for the preparation of the materials on the other issues.

[4] The only other issue that remains to be resolved in this estate is Mr. MacKenzie’s account. We spent considerable time on that issue yesterday, and I provided the parties with some directions. Some background history is in order to put those directions in context.

[5] As I understand it, Mr. MacKenzie was involved in the affairs of the estate both when the deceased’s property was sold, and subsequent to the sale of that property. Mr. Mackenzie’s account for that work was approximately $5,400.00.

[6] I understand that Mr. MacKenzie paid the account out of his trust fund and into his general ledger account. I also understand that this payment was subsequently disputed by Ms. Roberts, and Mr. MacKenzie returned the money to his trust account.

[7] Ms. Roberts is seeking production of all of Mr. MacKenzie’s original records as the ledger that she has does not appear to have this transaction recorded on it. The parties, and Mr. MacKenzie, are agreed that the amount currently in the trust account is correct. In that regard, I note that it is a dollar off the amount that I had recorded in my last reasons.

[8] The parties also agree that this amount should be paid into Court, and I have advised them that I will make an Order to that effect.

[9] However, that does not end the matter of Mr. MacKenzie’s account. Ms. Roberts has had Mr. Malcolm Mercer, a lawyer, write to both Mr. MacKenzie and to Mr. Jackson outlining Ms. Roberts’ position in this case. That correspondence was filed in Ms. Roberts’ Affidavit.

[10] In addition, Mr. Mercer had his office file a factum, which was late. However, Mr. Mercer is not yet on record. He also did not attend at today’s appearance, although I understand that he had intended to and was unavoidably detained.

[11] The position in Mr. Mercer’s factum, and as repeated by Ms. Roberts in her argument included the following points: a) Mr. MacKenzie has not taken steps to prove his account. b) The trust ledger is not complete and accurate. c) Mr. MacKenzie may not have provided all of the documents in his file. d) Mr. MacKenzie is a fiduciary and the courts have concurrent jurisdiction with the Law Society of Ontario to consider his conduct, and to provide remedies as appropriate.

[12] I addressed a number of points with the parties in Court yesterday. First, I expressed to Ms. Roberts that I was concerned that Mr. Mercer was purporting to file factums on this matter, but was not on the record. This puts both Mr. MacKenzie and Mr. Jackson in a difficult spot as they do not know whether, or to what extent, Mr. Mercer is acting for Ms. Roberts when he corresponds with them.

[13] I am of the view, therefore, that Mr. Mercer needs to advise as to whether, and to what extent, he is on the record in this case. I understand that counsel may be retained for one issue. However, if they are retained on that issue, and are acting before the Court on that issue, the Court and the parties are entitled to know that counsel is acting before the Court on that issue.

[14] Mr. Mercer is therefore directed to advise the Court as to whether he will be acting as counsel in respect of the issues relating to Mr. MacKenzie’s account within fourteen (14) calendar days of the appearance before me.

[15] This brings me to the next issue. Mr. Mercer provided Ms. Roberts with a series of notes, and she read at least part of those notes out in Court this morning. One of the positions that Ms. Roberts advanced (and that is advanced by Mr. Mercer in the factum) was that Mr. MacKenzie has not taken any steps to prove his account. From this, I infer that the position that Ms. Roberts is taking is that Mr. MacKenzie is obligated to either seek to have the account assessed or to commence a Statement of Claim before he can advance his account.

[16] I have serious concerns with this position. I am case managing this estate action, and the amounts that Mr. MacKenzie is seeking could be a debt of the estate. As a result, any Statement of Claim or assessment would have to come back before me. Seeking to have Mr. MacKenzie start a separate proceeding to prove his account would simply make this matter more complex and time-consuming.

[17] Therefore, if the account is to be claimed from the estate, then I retain jurisdiction to provide the parties with further directions over what should be done with this account. In that regard, I would re-iterate an observation that I made a number of times both yesterday, and at other points in the proceeding.

[18] It is possible that Mr. MacKenzie has breached his fiduciary duties to one or more parties by transferring the payment for his account out of his trust accounts. It is also possible that he is not entitled to collect on this account. I make no findings in this regard.

[19] Ms. Roberts argues that she is entitled, as a beneficiary, to the answers to both of these questions. However, the estate needs to be administered in a way that is efficient for both of the beneficiaries. If it is necessary for me to provide any further directions on how issues relating to Mr. MacKenzie’s account will be litigated, the parties should be prepared to address this issue in their submissions on what those directions should be.

[20] Finally, based on our discussion in Court on this point, Mr. Jackson provided the following information in regards to his client’s position. In light of the fact that Mr. Blanks’ portion of the disputed account is $2,700.00, he is prepared to agree that the full value of Mr. MacKenzie’s account can be paid out of the Estate and into court to the credit of a separate action encompassing issues relating to Mr. MacKenzie’s account. Mr. Blanks is also prepared to agree to assign any interest that the Estate may have (or that Mr. Blanks may have personally) in the chose in action against Mr. Mackenzie to Ms. Roberts. As I understand it, Mr. Blanks’ position is that he is prepared to forego his half of the value of Mr. MacKenzie’s account and to have that amount paid out to Ms. Roberts if she is successful in litigating the issues relating to Mr. MacKenzie’s account.

[21] If this position was accepted by the Court, or the other parties, then any litigation that Ms. Roberts wished to pursue against Mr. MacKenzie, along with any claim that Mr. MacKenzie wished to make for the account could be addressed outside the disposition of the late Mr. Blanks’ estate.

[22] In terms of the efficient management of the estate and the litigation before this court, this proposal has at least some superficial attractiveness. As a result, the parties are directed to choose a date during the week of May 13th, 2019 for a one hour appearance at 9:00 am. At that appearance, I will hear argument on whether Mr. Jackson’s proposal should be adopted.

[23] This appears to me to be a legal issue, so further Affidavits are neither required nor permitted. However, the parties are entitled to file factums and casebooks as long as they are filed by May 6th, 2019. These casebooks and factums are to be filed in person.

Conclusion and Costs

[24] For the foregoing reasons, I make the following Orders with respect to yesterday’s appearance: a) The timetable set out in my March 4th, 2019 endorsement for the trail of the issues in this case remains in force. No party has sought an adjustment to this timetable. b) Mr. Mercer is to advise all parties, and the Court, as to his role in this case within fourteen (14) calendar days of April 15th, 2019. c) The amount of $553,007.02 is to be paid into the Superior Court of Justice to the credit of this action. This money is not to be paid out until further Order of this Court. d) With respect to paragraph c, my direction that $25,000.00 is to be paid out to each of the remaining beneficiaries forthwith upon receipt of the money in the Superior Court continues to apply. e) The parties are to make arrangements this week for a date before me for a 9:00 am appearance the week of May 13th, 2019 to discuss the issue of whether I should direct that any chose in action relating to Mr. MacKenzie’s account should be assigned to Ms. Roberts in her personal capacity. f) The question identified in paragraph (e) appears to me to be a legal question. As a result, I am not prepared to receive further motion records. However, any party wishing to provide me with a factum and a case-book on this matter may do so as long as it is filed by May 6th, 2019.

[25] 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 as well as in my reasons of March 4th, 2019.

LEMAY J. Released: April 16, 2019