COURT FILE NO.: 16-2739 SR

DATE: 2020/09/23

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: CHARLENE MARIE KEW, ESTATE TRUSTEE DURING LITIGATION FOR THE ESTATE OF ROBERT THOMAS KEW, DECEASED, Plaintiff

AND:

STEVE KONARSKI, Defendant

BEFORE: Justice I.F. Leach

COUNSEL: John G. Langlois, for the Plaintiff

Justin N. O’Rourke, for the Defendant

HEARD: In writing

ENDORSEMENT (Direction of Reference)

[1] On August 4, 2020, I released my partial judgment in relation to this matter, which had proceeded by way of a judge alone trial. This endorsement should be read together with that partial judgment, reported as Kew v. Konarski, 2020 ONSC 4677.

[2] As indicated in paragraphs 96-112 of that partial judgment:

a. It was not possible for me to make a final judgment granting complete justice between the parties, as circumstances prevented resolution of damage entitlement and quantification issues.

b. In particular, until the defendant Mr Konarski completed efforts to comply with orders directing him to restore relevant vehicles and parts to the plaintiff’s possession, and the plaintiff Ms Kew then had an opportunity to carry out a proper inspection of what had and had not been returned, and the condition of what had been returned, it was not possible for the parties to lead evidence concerning further findings to be made in that regard. Nor were the parties able to make corresponding submissions relating to whether and to what extent the plaintiff should be entitled to damages for detinue and/or conversion. For similar reasons, it was not possible to address Mr Konarski’s assertions that he should be compensated, or at least receive credit, in relation to certain changes/improvements he claims to have made to some of the vehicles and parts while they were in his possession.

c. Consistent with preliminary views expressed at trial by counsel on behalf of the parties, and my own independent view of the situation, I accordingly contemplated the possible direction of a reference pursuant to Rule 54 of the Rules of Civil Procedure.

[3] I nevertheless refrained from directing such a reference immediately, in my partial judgment, as I thought it inappropriate to do so before:

a. I received confirmation, (after completion of Mr Konarski’s efforts to comply with my order directing a return of the relevant vehicles and parts to the plaintiff), that there were remaining monetary damage claims requiring the direction of a reference; and

b. counsel had been given an opportunity to make submissions regarding whether and how I should make the contemplated order directing a reference.

[4] My partial judgment nevertheless did include, (among the directions I made to address the further steps required to complete this litigation), the following direction at sub-paragraph 113(a):

If the plaintiff has remaining claims for monetary damages after return of the relevant vehicles and parts, and those claims are incapable of being resolved by agreement, counsel for the plaintiff and counsel for the defendant shall confer again before each delivering, within eight weeks of the release of this judgment, written submissions, (maximum 15 pages), providing their views regarding the contemplated direction of a reference pursuant to Rule 54 of the Rules of Civil Procedure, including their views on:

i. whether or not the parties still consent, pursuant to Rule 54.02(1)(a), to my directing such a reference;

ii. if there is no longer such consent, counsel views on whether a reference can or should be directed pursuant to Rule 54.02(1)(b);

iii. counsel views as to whom a reference, if any, should be directed pursuant to Rule 54.03;

iv. if the parties have agreed that the reference should be made to “a person agreed on by the parties”, counsel views regarding the determinations that should be made, if any, pursuant to Rule 54.03(3); and

v. counsel views as to the terms of the order to be made directing a reference, pursuant to Rule 54.04.

[Emphasis added.]

[5] I have not received the written submissions I directed and anticipated in that regard.

[6] On September 22, 2022, I instead received email correspondence from defence counsel Mr O’Rourke, (apparently sent with the consent of plaintiff counsel Mr Langlois, to whom the email correspondence was copied), and a number of documents attached to that email. In that regard, the email indicated and confirmed:

a. that the plaintiff had remaining claims for monetary damages that cannot be resolved by party agreement;

b. that the parties were agreed that I should direct a reference - essentially indicating consent, by affected parties, to the direction of a reference contemplated by Rule 54.02(1)(a) of the Rules of Civil Procedure; and

c. that the parties also had agreed that the reference should be directed to Mr Gregory J. Brimblecombe - thereby permitting direction of the contemplated reference to “a person agreed upon by the parties” pursuant to Rule 54.03(1) of the Rules of Civil Procedure.

[7] Attached to the email was biographical information for Mr Brimblecombe indicating, inter alia, that he is:

a. a qualified and practising lawyer, called to the bar in or around 1994, who previously worked for a decade as an insurance adjuster; and

b. someone who, in addition to or as part of his legal practice, acts as an appraiser and umpire in relation to “quantum disputes pursuant to the appraisal process and the Insurance Act”.

[8] In the circumstances, Mr Brimblecombe likely has experience relating to the valuation of vehicles and vehicle components, and the parties “agree that he appears particularly suited” to conduct a reference such as that contemplated in my partial judgment.

[9] Beyond the above, counsel did not tender submissions as requested, either separately or as a joint submission. They instead filed a Consent, executed on behalf of both parties, to the making of an attached draft Order. Amongst other things, the draft Order indicates:

a. that it would be made after my reading of the parties’ Consent, draft Order and submissions – although I actually did not receive the latter;

b. that Mr Brimblecombe generally would be directed to conduct a reference “pursuant to Rules 54 and 55 of the Rules of Civil Procedure”;

c. that Mr Brimblecombe nevertheless also would be directed to conduct the reference “in accordance” with numerous specified paragraphs of my reasons for partial judgment, and “within the parameters of the pleadings”;

d. that Mr Brimblecombe also would be directed to conduct the reference, “at least in part”, by the parameters established by the declaratory findings of fact, outlined in my partial judgment, “concerning the condition of vehicles and the presence, absence, location and/or destination of vehicle components”;

e. that issues “to be decided” on the reference would include those described or outlined in numerous paragraphs of the draft Order echoing, inter alia, comments made in paragraphs 93, 94, 97, 98, 101, 104, 108 and 112 of my reasons for partial judgment;

f. that “all necessary inquiries shall be made, accounts taken and costs assessed”; and

g. that the plaintiff would have carriage of the reference.

[10] I have no doubt counsel were intending to be helpful by providing me with a Consent and draft Order, rather than submissions as requested.

[11] However, I find their approach problematic for a number of reasons.

[12] First, it is important to remember that the direction of a reference is a significant delegation of judicial authority. Although Rules 54 and 55 of the Rules of Civil Procedure impose certain limitations in that regard, and allow the ambit of possibilities to be expanded by party agreement, the ability to make final determinations of whether and how such judicial authority should be delegated remains firmly vested in the court. They are not determinations to be made directly or indirectly by the parties, even if they have reached an agreement in relation to such matters. That is why I requested submissions in that regard, rather than party agreement and/or confirmed consent to a draft Order.

[13] Second, I think such concerns are reinforced in this instance by my preliminary view that direction of the contemplated reference was appropriate regardless of whether or not the parties agreed pursuant to Rule 54.02(1)(a) of the Rules of Civil Procedure; i.e., because I believed this particular situation engaged, in any event, the provisions of Rule 54.02(1)(b) permitting the court to direct a reference in situations “where a prolonged examination of documents or an investigation is required that, in the opinion of the judge, cannot conveniently be made at trial”. I thought and still think, (as I have not been provided with any submissions to the contrary), that is an apt description of the situation in this case, insofar as necessary determinations concerning the plaintiff’s entitlement to monetary damages and their quantification are concerned.

[14] Third, although the submissions I requested were to include counsel views regarding the determinations that should be made pursuant to Rule 54.03(3) of the Rules of Civil Procedure, (i.e., concerning remuneration of the contemplated referee and the liability of the parties for payment of that remuneration, if the referee was to be “a person agreed upon by the parties”), the draft Order is silent in relation to such matters. In that regard:

a. Concerns about a referee’s remuneration and liability of the parties to pay that remuneration obviously do not arise when a reference is directed to a judge, registrar or other officer of the court whose salary will be paid in any event by the federal or provincial government, regardless of the particular court-related tasks he or she is called upon to perform.

b. However, the situation obviously will be very different when a reference is directed to “a person agreed on by the parties”, who is made an “officer of the court” only for purposes of the reference, pursuant to Rule 54.03(2) of the Rules of Civil Procedure. In such circumstances, unless such a person confirms that he or she is willing to provide his or her services on a gratuitous basis, the referee likely will have to be paid for his or her services by one or both parties.

c. It is also important to remember that the issue of referee remuneration normally will not be addressed by standard provisions addressing how costs associated with the reference will be determined. In particular, such cost issues normally are focused only on whether and how one litigant should be obliged to provide his or her opponent with some measure of reimbursement for the costs that opponent has incurred in relation to a step in the litigation. That is something inherently separate and distinct from remuneration of a referee.

d. In my view, unless the circumstances are such that remuneration of a contemplated referee is not an issue, (e.g., because he or she has committed to acting gratuitously, or will be paid for their services in some fashion other than payment by one or both parties), an order directing a reference reasonably should include provisions addressing such issues in some fashion; e.g., by one of the alternatives suggested by Rule 54.04(3) of the Rules of Civil Procedure. Such provisions provide all concerned with a reasonable assurance that completion of the reference will not be delayed or prevented by referee concerns that he or she will not be paid for his or her services.

e. In the absence of submissions by the parties, (or evidence of any agreement between the parties and Mr Brimblecombe), I am inclined to think that the approach contemplated by Rule 54.04(3)(c) of the Rules of Civil Procedures is the most appropriate in this case. In particular:

i. It will provide Mr Brimblecombe with an assurance that this court will retain the ability to make a final determination quantifying his remuneration and ordering one or both parties to pay that remuneration; an ability that will be informed by provisions, in my order directing the reference, allowing Mr Brimblecombe to express his requests and views in that regard directly to the court in his report.

ii. At the same time, such an approach will provide the parties with an assurance that my order directing a reference has not exposed them to an indeterminate liability not subject to final court review and determination.

iii. I already have reserved costs of the trial and action for later determination, once the remaining substantive issues relating to damages have been addressed and resolved through the contemplated direction of a reference. The parties accordingly will be making cost submissions to me at some later date, once the reference procedure has run its course. In the circumstances, it seems to me that issues relating to quantification of the referee’s remuneration, and liability of one or both parties to pay that remuneration, can be addressed easily and efficiently at the same time.

[15] Fourth, while the draft Order includes a general direction that the referee is to conduct the reference “pursuant to Rule 54 and 55 of the Rules of Civil Procedure”, the draft Order is also silent in relation to other required determinations to be made by the judge directing such a reference. In particular, it contains no provisions making it clear whether the referee will be required to report back to me as the judge directing the reference to confirm the report, as contemplated by Rule 54.08, or whether the report instead will be confirmed by the passage of time or opposed hearing procedure contemplated by Rule 54.09.

[16] Fifth, I think some of the provisions included in the draft Order, essentially replicating the broad provisions of Rule 54.04(1)(a), should be refined, tailored to the circumstances and/or clarified, in order to prevent uncertainty. For example:

a. Barring further submissions from the parties, I have difficulty seeing how this case will require an accounting.

b. I do not think it appropriate to include a simple and unqualified direction that the referee is to “assess costs”. I already have indicated, in paragraph 117 of my reasons for partial judgment, that costs of the trial and action will be addressed at the conclusion of the litigation. In that regard:

i. I saw and see no reason why costs of the trial and action generally should not be reserved for my determination, as the trial judge.

ii. It seems to me that, as far as costs are concerned, the referee’s obligations and authority regarding cost issues should be limited to including, in his report, the referees views on whether either party should be obliged to pay the other’s costs associated with the reference and, if so, the quantum of the costs to be paid in that regard. (By “costs associated with the reference”, I mean costs including legal fees, disbursements and applicable HST associated with the reference but not the referee’s remuneration, for the reasons outlined above.) The referee will be in a much better position than I to formulate such views about costs associated with the reference, subject to his report in that regard being confirmed.

[17] Sixth, I do not think it advisable for the conduct of the contemplated referee in this case, or the issues to be decided, to be guided by oblique cross-references to provisions of my reasons for partial judgment which were not drafted for that purpose. In my view, clarity requires a separate and clear restatement of such directions in the Order, to guide the referee.

[18] Seventh, I think it appropriate to make further directions not addressed by the parties; e.g., placing certain limitations on the referee’s ability to expand the scope of this litigation, (by permitting pleading amendments and/or adding parties without further order of the court), and obliging the referee to ensure that any oral testimony provided during the reference is preserved to ensure its availability in the event of any appeal.

[19] In such circumstances, (i.e., where I have directed the provision of submissions and no submissions per se have been provided), I normally would be inclined to remind counsel of my earlier direction, and extend the time for such submissions to be provided, before making my order.

[20] In this case, however, I am mindful of the further indications, in Mr O’Rourke’s email, that the parties and Mr Brimblecombe already have made plans to move this matter forward in the very near future; i.e., in apparent anticipation of my simply signing the draft Order in accordance with the Consent filed by the parties. In particular, the email indicates that “preliminary dates have been set for engagement in this process, with the first such date being the exchange by the parties of briefs on or before October 15, 2020”.

[21] In the circumstances, I will proceed by treating the draft Order submitted by the parties as a joint submission; a submission which simply has not addressed certain issues, effectively leaving those issues to the discretion of the court.

[22] Having considered the matter from that perspective, I hereby make the following order:

a. Pursuant to Rule 54.02(1)(b) of the Rules of Civil Procedure, supplemented by the parties’ indicated agreement for the purposes of Rule 54.02(1)(a) of the Rules of Civil Procedure, a reference is directed to determine the issues indicated herein.

b. The reference is directed to Mr Gregory J. Brimblecombe, a “person agreed upon by the parties” within the meaning of Rule 54.03(1) of the Rules of Civil Procedure, and hereinafter referred to as “the referee”.

c. Pursuant to Rule 54.03(3)(c) of the Rules of Civil Procedure, and subject to any written agreement to the contrary made between the referee and the parties, determination of the referee’s remuneration and the liability of one or both parties for payment of that determined remuneration shall be reserved until the report on the reference is confirmed, with the court then making such determinations after receiving the non-binding views of the referee in that regard, (in and through his report), and party submissions.

d. Pursuant to Rule 54.04(1) of the Rules of Civil Procedure:

i. The nature and subject matter of the reference, to be conducted by the referee, shall focus on determination of the following general issues:

1. The monetary compensation, if any, which the plaintiff should receive from the defendant in relation to any vehicles or parts not restored to the plaintiff’s possession by the plaintiff, as directed by the order set forth in paragraph 82 of the partial judgment rendered herein by this court on August 5, 2020.

2. In relation to vehicles or parts restored to the plaintiff’s possession by the defendant, pursuant to the order set forth in paragraph 82 of the partial judgment rendered herein by this court on August 5, 2020, the monetary compensation, if any, which the plaintiff should receive from the defendant for damages inflicted on vehicles or parts, or other diminution in value of such vehicles or parts because of the defendant’s action or inaction, during the period in which the vehicles or parts were in the defendant’s possession.

3. The extent, if any, to which the defendant should receive compensation from the plaintiff, or at least an offsetting credit to be applied to any monetary compensation otherwise owed by the defendant to the plaintiff pursuant to the determinations made in the previous two sub-paragraphs, for any proven changes made to vehicles or parts restored to the plaintiff’s possession by the plaintiff while such vehicles or parts were in the defendant’s possession, to the extent the referee finds that such changes enhanced the value of the relevant vehicles or parts, thereby improving them.

4. The costs (if any) to be paid by either party to the other in relation to conduct of the reference, (but not other costs of this litigation), including legal fees, disbursements and applicable HST associated with conduct of the reference, (but not including the remuneration of the referee or the liability of either party or both parties to pay that remuneration, which issues shall be reserved to the court for determination).

5. The quantum of remuneration sought by the referee in relation to conduct of the reference, and the referee’s views concerning the extent to which either party or both parties should be made liable to pay that remuneration, on the understanding that determinations in that regard are reserved to the court, barring any agreement to the contrary between the referee and the parties.

ii. In making the above determinations, the referee shall be bound by, and have regard to, the findings and declarations set forth in paragraphs 88, 89, 90, 91 and 92 of this court’s partial judgment rendered herein on August 5, 2020.

iii. Additional matters to be considered by the referee, in making the above determinations, shall include but not be limited to:

1. whether or not the defendant returned specific vehicles and parts to the plaintiff’s possession, as directed in paragraph 82 of the court’s partial judgment rendered herein on August 5, 2020, and if vehicles were returned, whether or not particular components of those vehicles were present or absent when the vehicles were returned;

2. the condition of the relevant vehicles and/or parts at various times, (including the time when they were entrusted to the defendant’s possession and the time when they were returned to the plaintiff), and whether such vehicles and/or parts sustained damages not present when the defendant received the items;

3. the value of the relevant vehicles and/or parts at various times, (including the time when they were entrusted to the defendant’s possession and the time when they were returned or should have been returned to the plaintiff), having regard to any unique or unusual value the vehicles and/or parts may have had as antiques or collector items;

4. whether particular vehicles or parts reasonably need to be repaired or replaced;

5. if particular vehicles or parts reasonably need to be repaired or replaced, and that realistically is possible, the probable costs involved;

6. if particular vehicles or parts reasonably need to be repaired or replaced, but that realistically is not possible, the extent to which any resulting deprivation of an asset, (e.g., complete non-return of a vehicle or part), or diminution in value of an asset, (e.g., return of a vehicle without a part or component), is capable of being quantified in monetary damages; and

7. the labour and expense (if any) incurred by the defendant in making any demonstrable changes to a particular returned vehicle or part while it was in his possession, and the extent (if any) to which such labour and expense resulted in any increased value to the relevant returned vehicle or parts compared to the value of the relevant vehicle or part when it was entrusted to the defendant’s possession.

iv. Subject to the above, the referee shall make all inquiries necessary to make the determinations required by this reference.

v. No additional parties shall be added to the proceeding without further order of the court.

vi. No amendments shall be made to the pleadings herein without further order of the court.

vii. Where any witnesses on this reference are examined orally, such evidence shall be recorded so that a transcript of their evidence is capable of being made available, if and as necessary, on any appeal.

viii. The referee shall report back to the court and the referee’s report shall be confirmed in accordance with the provisions and procedures set forth in Rule 54.08 of the Rules of Civil Procedure.

ix. Subject to the above, the referee shall have all powers given to a referee pursuant to Rules 54 and 55 of the Rules of Civil Procedure, and shall act in accordance with the procedures mandated therein.

x. The plaintiff shall have carriage of this reference, for the purposes of Rule 55 of the Rules of Civil Procedure.

[23] Counsel should prepare a revised draft Order accordingly, and provide that to me through the London judicial secretaries for my review, finalization and signature.

[24] Should the parties require any further direction in relation to this matter, (apart from matters in respect of which direction properly should be sought from the referee pursuant to Rule 55.02 of the Rules of Civil Procedure), leave is granted pursuant to Rule 1.09(b) of the Rules of Civil Procedure for the parties to direct further written correspondence to my attention through the London judicial secretaries.

Ian F. Leach

Justice I.F. Leach

Date: September 23, 2020