Court File and Parties

COURT FILE NO.: 10-886 DATE: 2018/06/26 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Herbert James Frederick Burger commonly known as Herbert Frederick Burger Plaintiff/Defendant by Counterclaim

– and –

The Estate of Herbert Frederick Burger, The Estate of Herbert Frederick Burger represented by the Estate Trustees, Russell Kenneth Burger and Jason Herbert Burger and Russell Kenneth Burger and Jason Herbert Burger in their personal capacities Defendants/Plaintiffs by Counterclaim

Counsel:

In Person (for Herbert James Frederick Burger) Peter Sammon for Jason Burger Martin Diegel for Russell Kenneth Burger Robert Howe, Estate Trustee Pending Litigation - In person

HEARD: May 8, 2017, in Writing and Via Telephone conference call, June 11, 2018

REASONS FOR JUDGMENT

THE HONOURABLE JUSTICE L. C. SHEARD

OVERVIEW

[1] This action initially concerned a claim by the plaintiff, known as “Herbie Jr.”, against the estate of his late father (the “Estate”), Herbert Frederick Burger (the “Deceased”). Herbie Jr. asserted that certain real property belonged to him and not to the Deceased. In particular, Herbie Jr. laid claim to the scrap/scrap automobile business operated by the Deceased, as well as to certain lands, the ownership of which is the subject of separate litigation.

[2] The Deceased died on September 18, 2008. On August 24, 2011 a Certificate of Appointment of Estate Trustee During Litigation (“ETDL”) was issued to Robert B. Howe (“Howe”), pursuant to an order made on June 17, 2011.

[3] The beneficiaries of the Estate are Herbie Jr., and his brothers, who are the two individual plaintiffs by counterclaim, Russell Kenneth Burger (“Ken”) and Jason Herbert Burger (“Jason”). Previous orders vested some estate assets in Jason and Ken, subject to an allowance of a one-third interest in those assets, which was to be credited to Herbie Jr. That credit was then to be applied against the costs payable by Herbie Jr. At the time of this hearing, Herbie Jr. apparently owed costs of over of $86,000.

[4] This litigation concerned Herbie Jr.’s claim that he owned certain real and personal property that the defendants/plaintiffs by counterclaim claimed were owned by the Deceased. The counterclaim alleges that Herbie Jr. removed vehicles, equipment and lumber from the Deceased’s land belonging to the Deceased. By judgment dated January 13, 2014, James J. granted Herbie Jr. leave to discontinue his action and allowed the defendants/plaintiffs by counterclaim to pursue their counterclaim against Herbie Jr.

[5] By Order dated November 19, 2014, James J. struck Herbie Jr.’s defences to the counterclaims and further ordered that Herbie Jr. would not be entitled to call evidence or cross-examine witnesses but would be entitled to make submissions following the evidentiary portion of the trial [of the counterclaims]. As a result, the May 8, 2017 hearing before me proceeded by way of an assessment of damages on the counterclaim.

[6] The Motion Record filed at the May 8, 2017 hearing included copies of 15 endorsements made between June 17, 2011 and December 10, 2015, which included numerous costs orders made against Herbie Jr. As at the date of the May 8, 2017 hearing, Herbie Jr. owed approximately $86,000 in costs.

[7] After the death of the Deceased, Herbie Jr. was seen removing equipment and trees from the Deceased’s property. The value of the assets he removed and the resulting diminution in the value of the Estate was the central issue before me on May 8, 2017. In the course of that hearing, it became clear that further evidence was required to quantify the damages suffered by the Estate. The hearing was adjourned to allow the plaintiffs by counterclaim to gather the evidence required.

[8] Rather than to resume the oral hearing, in February 2018 the parties chose to complete their damages evidence by way of affidavit. The Court was provided with the affidavit of Russell Kenneth Burger on February 23, 2018 (the “RKB Affidavit”).

[9] As it was not clear that the RKB Affidavit had been served on Herbie Jr., by way of brief endorsement dated May 25, 2018 (the “Endorsement”), the parties were directed to serve the RKB Affidavit on Herbie Jr. The Endorsement also asked the Pembroke Trial Co-ordinator to schedule a telephone conference call among counsel, and Herbie Jr., who was acting in person, to discuss:

i) if, and how, Herbie Jr. would make his submissions, that were to follow the evidentiary portion of the trial (that was completed with the filing of the RKB Affidavit); and

ii) to allow counsel to address my questions arising from the RKB Affidavit.

[10] The Trial Co-ordinator contacted counsel and attempted, unsuccessfully, to contact Herbie Jr. to schedule the conference call. On June 11, 2018 a conference call was held. It was recorded by court reporter located in the Pembroke Court House in the presence of the trial Co-ordinator. Counsel for the parties and Howe took part, but Herbie Jr. did not. On the conference call, the parties confirmed that the Endorsement had been served on Herbie Jr. by mailing it to his last known address. The Trial Co-ordinator advised that she had left phone messages with Herbie Jr., but had not succeeded in speaking with him by telephone. Counsel advised that Herbie Jr. had not been seen for some time and that his whereabouts were unknown.

[11] As per the terms of the Endorsement, the conference call proceeded in the absence of Herbie Jr., who was deemed to have given up his right to take any further part in the proceedings.

[12] Ken and Jason asked the Court to determine the value of the Estate and the value of the items removed from the Estate by the plaintiff, known as “Herbie Jr.”; and an order vesting the remainder of the Estate assets in their names as beneficiaries, to the exclusion of Herbie Jr.

Damages Evidence

i) Trial Evidence

[13] Howe was the first witness at the May 8, 2017 hearing. He was appointed as ETDL in 2011, three years after the death of the Deceased. From the outset of Howe’s appointment, he was confronted with allegations from Herbie Jr. that he owned certain assets located on lands registered in the name of the Deceased owned by the Estate and even that he owned the lands themselves.

[14] The three-year gap between the date of death of the Deceased and his appointment as ETDL hampered Howe’s ability to identify the Estate assets that existed at death and what Estate assets, if any, had been removed from the Deceased’s property by Herbie Jr. after death, and the value of those assets.

[15] Ken was the second witness to testify at the hearing. Ken was able to provide background information about the business operated by the Deceased. He explained that the Deceased operated a number of businesses: logging, landscaping, the purchase and sale of heavy equipment, and the sale of aggregates. Ken stated that he lived on the Deceased’s property and was aware of what vehicles were owned by the Deceased and located on the Deceased’s property as at death. Ken asserted that he was able to identify what Estate assets Herbie Jr. had removed from the Deceased’s property.

[16] Ken stated that he checked the Deceased’s property weekly following the death of the Deceased. Ken also heard from a neighbour, Steve Gilchrest, who would text or call Ken when he saw Herbie Jr. removing things from the Deceased’s property. Ken’s evidence was that most of the equipment remained on the Deceased’s property, but had gone down in value by reason of disuse and deterioration.

[17] Ken asserted that he was an expert in heavy equipment and purported to give evidence as to the value of the equipment taken by Herbie Jr. Ken also testified that he had some expertise in aggregates and, using his prior knowledge, could “guesstimate” the amount of sand that had been removed from the Deceased’s property after death. He estimated that between 300 and 400 loads of sand had been removed by Herbie Jr.

[18] Ken also testified that he had 15 years of experience in logging and by counting stumps, and measuring the size and type of trees cut, he could estimate the size of the tree and the boards that could be made from the tree. He also noted that a lot of logs had been taken of the type that would be used for firewood.

[19] Based on his own observations of the equipment used in logging located on the Deceased’s property, noting that the saw’s motor was hot from recent use, and the debris around the saw, Ken had no doubt that Herbie Jr. had taken trees from the Deceased’s property.

[20] As at the time of the hearing before me, Howe did not have a complete inventory or valuation of the Deceased’s assets. In particular, although there was strong evidence put before the court on May 8, 2017, concerning the vehicles, scrap metal and lumber that Herbie Jr. removed from the Deceased’s property after the death of the Deceased, at the May 8, 2017 hearing, there was insufficient independent evidence as of the value of those assets. As a result, the trial was adjourned to allow for better evidence to be put before the Court on that issue.

ii) Evidence in RKB Affidavit

[21] The RKB Affidavit, prepared with the consent and input of the counsel and of Howe, included a summary of the Estate assets and also listed the personal property that Ken had testified had been removed from the Deceased’s property by Herbie Jr. after the death of the Deceased.

[22] I accept Ken’s evidence on this point.

[23] Attached as an Exhibit to the RKB Affidavit is an Appraisal Report (undated) from Geoffrey G. Neville, President of Neville Motors, addressed to Howe. Neville’s valuation expertise is derived from his 34 years of experience in the automotive and machine equipment sales and appraisal industry in the Ottawa Valley. He states that his pricing was based on “an average and fair market value of the replacement value of the item in a reasonable used condition based on the year of the” vehicle or equipment listed in his report. Mr. Neville references his Appraiser and Salesman licence as well as his Dealer License numbers in his letter.

[24] I am satisfied that Neville is able to provide valuation opinion evidence.

[25] Based on Neville’s report, the vehicles and equipment taken by Herbie Jr. from the Estate had an estimated replacement value of $253,100 [1] .

[26] The RKB Affidavit also references copies of invoices produced by Herbie Jr. pursuant to Court Order, which recorded that Herbie Jr. received $109,177 from the sale of scrap metal he removed from the Deceased’s property. These invoices all post-date the death of the Deceased and I am satisfied from all the evidence before me - oral and written - that the scrap metal sold by Herbie Jr. belonged to the Deceased and formed part of the Estate assets.

[27] The RKB Affidavit also mentions that Herbie Jr. removed sand from the Deceased’s property, which he then sold, pocketing the sale proceeds. Ken’s Affidavit also refers to Herbie Jr. allowing garbage to be dumped on the Deceased’s property, for which Herbie Jr., but not the Estate, received payment. While Ken’s Affidavit does not provide a value under those headings, it does reference his earlier affidavits in which he put a value on those assets.

[28] There is ample evidence before me to establish on a balance of probabilities that Herbie Jr. removed and sold Estate assets and kept the sale proceeds. I am also satisfied that the Estate has put forth the best available evidence as to the value of the personal property taken and sold by Herbie Jr. I further find that the RKB Affidavit likely understates the full value of the Estate assets converted by Herbie Jr., in that it does not include the value of the sand and/or gravel.

Relief Sought

[29] The moving parties seek the following:

(a) an order vesting all of assets and chattels located at 728 Black Bay Road in Russell Kenneth Burger and Jason Herbert Burger;

(b) an order vesting in Russell Kenneth Burger and Jason Herbert Burger the “building lot” legally described as Part Lot 16, Concession 5, Petawawa, Part 1, 49R1044, Town of Petawawa, PIN 57106-0047 (LT), Land Registry Office No. 49;

(c) an order vesting in Russell Kenneth Burger and Jason Herbert Burger any and all interest of Herbert Frederick Burger, deceased, in the approximately 94 acres located at 728 Black Bay Road, Petawawa, Ontario, which property is legally described as 16 Concession 5, Petawawa, lying NE of Part 2, RI 29282 , Except 49R1044, Town of Petawawa, PIN 57106-0048 (LT), Land Registry Office No. 49 (the “94 Acres”);

(d) an order that the monies held in trust by solicitor Robert B. Howe be paid to Russell Kenneth Burger and Jason Herbert Burger. The parties contemplate that the amount to be paid out would be $15,927.48: assets on hand, net of payment of the estate trustee’s account of $11,657.75 ($27,585.23 - $11,657.75); and

(e) judgment against Herbie Jr. equal to the value of the assets he has taken from the Estate less a credit of his one-third residuary interest in the Estate.

Disposition:

i) Value of Estate Assets Converted by Herbie Jr.

[30] I accept the evidence provided both at the oral hearing and as found in the RKB Affidavit as to the value of the Estate assets taken by Herbie Jr. and find that Herbie Jr. Herbie Junior converted to his own use Estate assets valued at $362,277, which included scrap metal at $109,177 and equipment and vehicles valued at $253,100, which money is due and owing to the Estate by Herbie Jr. subject only to a reduction equal to his one-third residuary share of the Estate.

[31] The Estate’s ownership of the 94 Acres is disputed: a claim has been brought by certain Burger relatives against the 94 Acres, which they claim belongs to the Deceased’s father. That claim is close to trial. If the Estate is successful in defending the claim, the 94 Acres will form part of the Estate. If the Estate is unsuccessful, the Estate will be entitled to only a one-fifth interest in the net value of the 94 Acres.

[32] Given the uncertainty of the Estate’s ownership in and the ultimate value to the Estate of the 94 Acres, for the purposes of calculating the credit to be allowed Herbie Jr. for his one-third residuary share of the Estate, the value of the 94 Acres will be excluded.

[33] If it is determined by a Court, or otherwise, that the Estate owns the 94 Acres, then Herbie Jr. is entitled to claim a credit equal to his one-third residuary interest in the 94 Acres (net of all associated expenses) against the amounts he has been ordered to pay to the plaintiffs by counterclaim.

ii) Value of the Residue of the Estate and Credit to Herbie Jr.

[34] Exhibit 1 to the RKB Affidavit is a document entitled: Burger Assets. This document includes an estimated net value of the 94 Acres of $243,025 ($280,000 – $36,975) in the total value of the Estate assets. In addition, the calculation of the Estate assets in this document fails to include the $362,277 in Estate assets taken by Herbie Jr. Finally, in the June 11, 2018 conference call, Howe advised that, after payment of his legal fees of $11,657.75, there would be $16,007.59 in cash remaining in the Estate bank account. Therefore, that figure is used to calculate the Estate assets instead of the $15,927.48 shown in Exhibit 1.

[35] I therefore calculate the undisputed Estate assets as follows:

Item	Value
728 Black Bay Road (building lot)	$ 40,000.00
Bush Lot (sold, proceeds paid into court)	$ 10,200.00
Cash with ETDL (net of legal fees)	$ 16,007.59
Henry Point Road (value accepted by James J.)	$114,000.00
Assets taken by Herbie Jr.	$362,277.00
TOTAL ESTATE ASSETS	$542,484.59

[36] Based on the above, Herbie Jr.’s one-third residuary share of the undisputed Estate assets is $180,828.20 ($542,484.59 ÷ 3). Herbie Jr. has taken Estate assets worth $362,277, $181,448.80 more than his residuary share ($362,277 - $180,828.20). That amount is to be repaid to Ken and Jason who shall have judgment against Herbie Jr. in the amount of $181,448.80.

iii) Vesting Order

[37] Howe, Ken and Jason, agree that Howe should be released as ETDL and that the remaining Estate assets should be vested with them. Further, given my findings above that Herbie Jr. has received well in excess of his residual share of the Estate, an order shall issue vesting title of the Estate assets as requested in paragraph 29 (a) to (d), above.

COSTS

[38] Ken and Jason, as plaintiffs by counterclaim, have been successful in this claim and are presumptively entitled to their costs of their counterclaim, subject to any offers to settle that might affect costs. Ken and Jason may deliver written submissions within 21 days of the date of the release of these Reasons. Herbie Jr. shall deliver his reply submissions, if any, within 14 days of service upon him of Jason and Ken’s costs submissions. Jason and Ken may have seven days from the date of service upon them of Herbie Jr.’s cost submissions to deliver a reply, if any, to his cost submissions.

[39] Cost submissions are not to exceed three typed pages in length and may also include the parties’ Bills of Costs, supporting evidence respecting time spent, and disbursements, copies of any relevant offers to settle, and briefs of authority, if required.

Sheard J.

Released: June 26, 2018

COURT FILE NO.: 10-886 DATE: 2018/06/26 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Herbert James Frederick Burger commonly known as Herbert Frederick Burger Plaintiff/Defendant by Counterclaim – and – The Estate of Herbert Frederick Burger, The Estate of Herbert Frederick Burger represented by the Estate Trustees, Russell Kenneth Burger and Jason Herbert Burger and Russell Kenneth Burger and Jason Herbert Burger in their personal capacities Defendants/Plaintiffs by Counterclaim

REASONS FOR JUDGMENT Sheard J. Released: June 26, 2018

[1] Paragraph 7 of the RKB Affidavit states the Neville report values items at $243,100 appears to be incorrect. When added, the values placed on the vehicles and equipment in the Neville Report total $253,100.