COURT OF APPEAL FOR ONTARIO
CITATION: Blundell v. Milmine, 2014 ONCA 480
DATE: 20140619
DOCKET: C58096
MacPherson, Simmons and Gillese JJ.A.
BETWEEN
Melvin Blundell
Plaintiff (Respondent)
and
Stephen Bruce Milmine, personally and as Estate Trustee for the Estate of Sylvia Milmine
Defendants (Appellants)
R. Stewart, for the appellants
L. Farrell, for the respondent
Heard: June 9, 2014
On appeal from the judgment of Justice Kelly A. Gorman of the Superior Court of Justice, dated November 15, 2013.
By the Court:
[1] Sylvia Milmine had five sons, one of whom is Stephen Milmine. She died in September 2001, leaving Stephen as her estate trustee.
[2] Stephen Milmine appeals from a judgment dated November 15, 2013 (the “Judgment”) in his capacity as estate trustee and personally.
[3] For the reasons that follow, the appeal is allowed.
BACKGROUND IN BRIEF
[4] Through her will (the “Will”), Ms. Milmine directed that the residue of her estate (the “Estate”) is to be distributed in equal shares to six people: her five sons and Melvin Blundell, Ms. Milmine’s common law spouse and the respondent in this appeal (the “respondent”).
[5] Under the terms of the Will, the respondent was given the right to operate and manage Ms. Milmine’s three rental properties and to receive the profits therefrom. The Will provided that the properties were to be sold no later than December 31, 2017. It also gave Ms. Milmine’s sons the first right to purchase the properties.
[6] Stephen Milmine understood that the Will empowered him, as the estate trustee, to sell the properties at any time but no later than December 31, 2017. In March 2004, he sold the properties to himself and his wife, Laurie Milmine.
[7] The respondent objected to the sale of the properties because he thought that the Will directed that the properties were not to be sold before December 31, 2017.
[8] A trial on this matter ensued and the respondent prevailed.
[9] However, the properties could not be reconveyed to the Estate because they had been mortgaged and the bank holding the mortgages would not consent.
[10] The parties entered into an agreement to settle their differences. This led to an order dated October 6, 2009 (the “October 2009 Order”), which dictated that:
Stephen Milmine and Laurie Milmine were to hold the properties in trust for the Estate and the respondent;
The respondent had responsibility for managing the properties;
Capital expenditures for the properties were to be paid by the Estate and all regular operating expenses were to be paid from the income from the properties; and
Stephen Milmine was personally liable to pay damages to the respondent of (i) $63,174.10 for lost income on the properties from March 1, 2004, to October 27, 2009, plus (ii) $1,000 per month until the respondent began receiving the income from the properties.
[11] The respondent began managing the properties on March 1, 2011. He collected the rents from that point forward but did not make the mortgage payments.
[12] The Estate paid the mortgages for March, April, May and June 2011 but discontinued that practice after the parties were unable to resolve their differences over management of the properties.
[13] It appears that the parties agreed that the 2009 Order required the respondent to pay the mortgages from the rental income he received for the properties. But the respondent felt that he should not have to pay the mortgages because Stephen Milmine owed him money pursuant to the terms of the October 2009 Order.
[14] In any event, no further mortgage payments were made after June 2011.
[15] In May 2012, the respondent brought a motion to quantify his damages arising after March 1, 2011. That motion was adjourned to give Stephen Milmine an opportunity to provide evidence. The same order provided that if the mortgagee proceeded with a sale of the three properties, the net proceeds of sale should be paid into court. The mortgagee eventually sold the three properties under power of sale and approximately $260,000 was paid into court.
[16] In 2013, the respondent brought a second motion to quantify the damages arising after March 1, 2011, and to have those damages paid out of the monies held in court.
[17] In the Judgment, damages of $173,413.28 are ordered in favour of the respondent, payable from the monies held in court.
[18] The entirety of the reasons of the motion judge reads as follows:
The Parties agree that damages of $55,453.35 are properly owed to the [respondent]. A further quantification is submitted by the [respondent], attached as Appendix “A”. I am prepared to award an amount for (total) damages as follows:
$55,453.35
$5,000.00 (credit of $5450.00[^1] to the [appellants])
$65,000.00
1/6 proceeds $47,959.93
This amount is to be paid from funds held in court; these funds are the property of the Estate and held in trust to the benefit of Estate and [respondent]. Costs in the amount of $2500.00 payable by the Estate forthwith.
THE ISSUES
[19] The appellants submit that the motion judge erred in:
(i) making orders not supported by the evidence adduced on the motion regarding who should pay damages;
(ii) assessing damages for the period after the respondent began managing the rental properties; and
(iii) providing insufficient reasons.
ANALYSIS
[20] In our view, this appeal must be allowed.
[21] The appellants’ first submission is that the order requiring the Estate to pay damages is not supported by the evidence. This argument is based on the October 2009 Order in which Stephen Milmine personally was ordered to pay damages to the respondent. We understand that this ground of appeal does not extend to encompass the $47,959.63 figure in the Judgment, which is said to be the amount of the respondent’s one-sixth interest in the residue of the Estate. It appears that the first sum referred to in the Judgment of $55,453.35, is an amount still owing pursuant to the October 2009 Order, which required Stephen Milmine personally to pay damages to the respondent. It is unclear on the record and from the reasons whether the two remaining items in the Judgment are also damages which Stephen Milmine has been ordered personally to pay as damages to the respondent.
[22] The motion judge was correct when she stated that the parties agreed that damages of $55,453.35 were properly owed to the respondent. However, the parties did not agree on who was to pay those damages.
[23] The motion judge gave no reasons for why the Estate was to pay these damages. In light of the fact that, at a minimum, one of the amounts ordered payable from the Estate was an amount for damages that are payable by Stephen Milmine personally, it is unclear why that would be the case. It bears noting that payment of such damages from the Estate would reduce the amounts available to pay the other residuary beneficiaries their one-sixth shares. It is puzzling, as well, why the respondent’s one-sixth share in the residue was calculated on the net proceeds of sale, as opposed to one-sixth of the net amount remaining after payment of Estate liabilities associated with the properties. In this regard, we note that pursuant to various court orders, the Estate was to bear the cost of capital repairs and expenditures.
[24] It may be that there are valid reasons to have ordered the sums in question to have been payable from the Estate but, on this record, and in the absence of reasons, this court cannot decide whether such an order is correct or not.
[25] The appellants’ second ground of appeal relates to that part of the Judgment in which damages are ordered for lost income from the properties from the time of their sale by the bank to December 31, 2017. As there are no reasons given for making this order, it is not clear why the respondent is entitled to such damages given that it was his default in making the mortgage payments that led to the sale of the properties. We cannot say whether such an order is correct or not, because no reasons were given for it, the record is insufficient to determine that matter and none of the necessary findings of fact have been made.
[26] It will be apparent from the foregoing that the absence of reasons makes it not possible for this court to determine why the orders were made, whether they were correctly made and whether justice has been done. As previously mentioned, due to the insufficiency of the record and the absence of the necessary findings of fact, the court is unable to decide the issues that were raised on the motion.
DISPOSITION
[27] Accordingly, the appeal is allowed, the Judgment set aside and the motion dismissed. The appellants did not seek costs of the appeal and none are awarded.
Released: June 19, 2014 (“E.E.G.”)
“J.C. MacPherson J.A.”
“Janet Simmons J.A.”
“E.E. Gillese J.A.”
[^1]: This figure is from the Judgment. The handwritten endorsement of the motion judge has a figure of $5,460, rather than $5,450.