Blundell v. Milmine, 2015 ONSC 2813

COURT FILE NO.: 33444/04

DATE: 2015/04/29

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: MELVIN BLUNDELL (Plaintiff)

AND:

STEPHEN BRUCE MILMINE, PERSONALLY AND AS ESTATE TRUSTEE FOR THE ESTATE OF SYLVIA FERN MILMINE and LAURIE MILMINE (Defendants)

BEFORE: Justice B.W. Miller

COUNSEL: Lou-Anne F. Farrell, for the plaintiff

Robert Stewart, for the defendants

HEARD: April 15, 2015

ENDORSEMENT

[1] This is the defendants’ motion for distribution of funds presently held in court. The defendants seek an order that the funds be paid to Stephen Milmine in his capacity as estate trustee and in trust for the estate, so that Mr. Milmine can proceed with the passing of accounts. It is the defendants’ position that the plaintiff, Mr. Blundell, has no claim to the funds that remain in court.

[2] The plaintiff, Mr. Blundell, resists the order and asks that damages be assessed against the estate and be paid to him from the funds held in court. In the alternative, he seeks directions from the court as to how his remaining claims against the defendants should proceed.

[3] It should be noted that there is no motion before the court for the relief that Mr. Blundell seeks. The relief sought is set out in Mr. Blundell’s factum on the defendants’ motion.

[4] This motion is the most recent salvo in protracted litigation over the estate of Sylvia Fern Milmine, who died in September, 2001. The relevant history is set out in Blundell v. Milmine, 2014 OCA 480, which I recount below in an abbreviated form.

[5] Sylvia Milmine died in September 2001, leaving her son Stephen Milmine as her estate trustee. The plaintiff was her common law spouse.

[6] Ms. Milmine directed that the residue of her estate be distributed in equal shares to six people: her five sons (including Stephen Milmine) and the plaintiff.

[7] Under the terms of the will, the plaintiff was given the right to operate and manage certain rental properties until December 31, 2017, and to receive the profits from them.

[8] The properties were sold prematurely by the estate, through Stephen Milmine acting as estate trustee, to Stephen Milmine and his wife, Laurie Milmine.

[9] Mr. Blundell attacked the transaction and was successful on a trial of this issue, and the properties were ordered to be reconveyed back to the estate. That order was frustrated, however, by the refusal of the mortgagee to consent. The parties then agreed to a consent order in October 2009 that provided, in part, that the properties would be held in trust by Stephen Milmine and Laurie Milmine for the estate and the plaintiff; that the plaintiff would manage the properties; that capital expenditures would be paid by the estate and operating expenses would be paid from the income from the properties; and, that Stephen Milmine was personally liable to pay damages to the plaintiff in the amount of $63,174.10 for lost income from managing the properties from March 1, 2004 to October 27, 2009, plus additional damages of $1,000 per month until the plaintiff began to manage the properties again and began receiving income from the properties.

[10] The plaintiff began managing the properties again on March 1, 2011. He collected the rents but did not pay the mortgage. The reason that he did not pay is disputed, but on the plaintiff’s account it is because he was never provided with the particulars of the mortgage to enable him to pay, and because he had a significant unpaid judgment against the Stephen Milmine that he claimed as a set-off.

[11] In any event, the mortgage went into default. Thereafter, the bank brought power of sale proceedings.

[12] The properties were eventually sold by the mortgagee and surplus proceeds of approximately $260,000 were paid into court after payment of the mortgage. At that time, in May 2012, the plaintiff brought a motion to quantify his damages arising after March 1, 2011. That motion was adjourned for the purpose of providing Stephen Milmine the opportunity to respond.

[13] In 2013, the plaintiff brought a second motion to quantify his damages arising after March 1, 2011, and to have those damages paid out of the monies held in court.

[14] He was successful before Gorman J., who ordered $173,413.28 payable to him from the monies held in court. Damages were itemized as follows:

a. $55,453.35

b. $5,000 (credit of $5,450 to the defendants)

c. $65,000

d. 1/6 proceeds of $47,959.93

[15] The defendants appealed the order of Gorman J. dated November 15, 2013.

[16] The first of the fours sums itemized in that order ($55,453.35) was characterized by the Court of Appeal as the amount that remained unpaid from an award of damages that had been made in favour of the plaintiff on consent in October 2009. On appeal, the defendants agreed that this amount remained owing by Mr. Milmine, but disagreed that the estate had any liability. The Court of Appeal agreed and allowed the appeal of this award against the estate.

[17] The defendants did not appeal the award of the fourth sum (1/6 of $47,959.93), which was said to be the plaintiff’s 1/6 interest of the residue of the estate, which has since been paid by the estate to the plaintiff from the funds held in court.

[18] With respect to the second and third sums ($5,000 and $65,000), these are amounts claimed by the plaintiff for lost income from managing the properties for the periods March 1, 2011 – July 1, 2012 and from July 1, 2012 – December 31, 2017, respectively.

[19] The second sum ($5,000) was calculated by Gorman J., the plaintiff claims, as $10,460 in income foregone by the plaintiff due to the mortgagee having attorned some of the rents, less an estimate of what the defendants had paid in operating expenses during that period.

[20] The third sum ($65,000) was calculated, according to the plaintiff, as the amount of $1,000 per month for 65 months from the period when the plaintiff lost control of the properties until December 13, 2017, when the estate would have been at liberty to sell the properties under the terms of the will.

[21] The Court of Appeal held that it could not assess, from the record, why the plaintiff would be entitled to these damages ($5,000 plus $65,000) when it was his default that led to the sale of the properties.

[22] Ultimately, the Court of Appeal concluded, ‘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.’ Because of the ‘insufficiency of the record and the absence of necessary findings of fact’ the court held that it was ‘unable to decide the issues that were raised on the motion.’

[23] In its disposition, the Court held that ‘the appeal is allowed, the Judgment set aside and the motion dismissed.’

The current motion

[24] There is some disagreement about where that leaves things.

[25] The defendants, who are the moving parties, accuse the plaintiff of hijacking this motion to reargue the motion that was overturned on the appeal. Indeed, the plaintiff has filed additional materials intended to supply the gaps in the record and provide an explanation for why the motions judge made the order that she did. The defendants have filed responding materials and much remains disputed.

[26] The defendants argue that as theirs is the only motion before this court, I need not consider the relief that the plaintiff has sought in his factum.

[27] The defendants argue that the Court of Appeal dismissed the motion and that it is now a matter of res judicata. They draw attention to the fact that the Court of Appeal did not remit the matter back for a rehearing, or dismiss the motion without prejudice so that it could be reheard on an expanded record. Indeed, the defendants argue that it would be improper for the court to engage in what would be essentially a rehearing of the motion that was before Gorman J. on the expanded record that has since been filed.

[28] The plaintiff, on the other hand, argues that the Court of Appeal did not decide the plaintiff’s motion on its merits, and it would be unjust to simply let matters end there. The plaintiff asks that if I am unable to grant the relief sought in his factum, that I give some directions for how the substantive dispute as against the estate and the personal defendants can be brought to a resolution.

[29] The defendants argue that there is no injustice. The plaintiff is at liberty to bring whatever claims he has against the estate to the estate trustee on the passing of accounts. But in reality, the defendants argue, the plaintiff has no further claims against the estate. He has already been paid out his 1/6 share of the residue. The only claims that the defendant has remaining must be brought against Stephen Milmine in his personal capacity and not the estate.

[30] I agree with the defendants that it would be inappropriate on this motion for me to entertain, on the basis of the fresh evidence provided, whether (in effect) the original judgment should be reinstated. That motion against the estate is now a matter of res judicata and is not open to me to rehear it. The plaintiff argues that the Court of Appeal did not make a determination on the merits (‘the court is unable to decide the issues that were raised on the motion’) and that it is therefore still open to me to do so. I disagree. The Court of Appeal dismissed the motion. It could have dismissed the motion without prejudice for a rehearing on a more complete record. It did not do so.

[31] I therefore grant the order that the funds held to the credit of the estate be paid out of court to Stephen Milmine in his capacity as Estate Trustee and in trust for the estate of Sylvia Milmine, and that Stephen Milmine pass accounts.

[32] Where does that leave things with respect to the plaintiff’s outstanding damages claims against the personal defendants?

[33] Of the four sums ordered by Gorman J, the fourth is fully resolved. The first is a matter that is already the subject of an order, and the question of the amount that remains payable by Stephen Milmine should be capable of resolution by an accounting.

[34] With respect to the second and third sums, although the Court of Appeal ruled that the damages sought are not payable by the estate, Mr. Milmine has admitted liability to the plaintiff in his personal capacity (paragraph 11 of the Affidavit of Stephen Milimine, October 29, 2014). However, he disputes the quantum of damages claimed by the plaintiff ($5,000 plus $65,000).

[35] On this remaining issue - of the quantum of damages payable to the plaintiff from the defendant Stephen Milmine for foregone income from the properties from the period of March 1, 2011 to December 31, 2017 – the plaintiff can either proceed to trial or proceed by way of a summary procedure.

Costs

[36] The defendants are entitled to their reasonable costs of this motion. I will accept brief written submissions on costs within 20 days of the date of this endorsement, with reply submissions within 7 days thereafter.

“Justice B. W. Miller”

Justice B.W. Miller

Date: April 29, 2015