Court File and Parties

Court File No.: CV-15-542004 Court File No.: CV-16-557634

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

DIETER HUBERT KNOPPKE Plaintiff

and

UNIFUND ASSURANCE COMPANY and HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO Defendants

- and -

ALEX G. KREK Plaintiff

and

DIETER HUBERT KNOPPKE Defendant

Counsel: Nathan Fabiano, for Alex G. Krek John Telfer, for Dieter Hubert Knoppke Dennis O’Leary and Thomas Lacerte, for Unifund Assurance Company

Endorsement

[1] The Plaintiff by Counterclaim, Unifund Assurance Company (“Unifund”), brings this motion under Rule 49 of the Rules of Civil Procedure. A settlement agreement between it and the Defendant by Counterclaim, Dieter Knoppke (“Knoppke”), was executed on August 26, 2022 (“Settlement”). This agreement followed a lengthy mediation presided over by the Honourable Todd Archibald.

[2] At the mediation and in all respects of the Settlement, Knoppke was represented by counsel. Knoppke is represented by counsel at today’s motion, but counsel advises that he has been unable to get instructions as to how to respond to the relief sought.

[3] The Settlement required, inter alia, that Knoppke pay Unifund $600,000 within four months of its signing on August 26, 2022. Knoppke has defaulted on that payment obligation. This motion seeks to enforce the Settlement and require Knoppke to make the agreed-upon payment.

[4] Counsel advises that for three decades, this and other legal proceedings have persisted between the parties. It was finally revealed through video surveillance in 2016 that Knoppke had been dumping home heating oil into a well on the property of his neighbour, Alex Krek (“Krek”). Unifund is Krek’s insurer and had spent more than $2 million over the years attempting to deal with the mysterious, reappearing contamination and the legal proceedings that accompanied it.

[5] Unifund shall have an Order that the Settlement amount is payable forthwith.

[6] Counsel for Unifund points out that I have discretion under section 130 of the Courts of Justice Act to impose a different rate of interest for pre-judgment interest than the rate that is otherwise applicable. Knoppke was obliged under the Settlement to seek to finance his payment obligations but appears to have made no effort to do so. Had he obtained mortgage on his property at that time, it would have carried a significantly higher interest rate than today’s low rate. Unifund’s counsel suggests that a 5% rate is appropriate.

[7] Unifund shall have an Order that pre-judgment interest on the $600,000 payment will be at the rate of 5% from the date of the Settlement until the date of judgment. Post-judgment interest will be at the applicable Courts of Justice Act rate.

[8] In addition to Unifund’s motion for payment of $600,000 under the Settlement, Krek’s counsel also seeks a continuation order. Alex Krek has died, and the litigation is to be continued by his estate. The title of proceedings is to be changed to reflect Frances Krek as executor of the estate of Alex Krek.

[9] Krek’s counsel also moves to have a 1997 Order of this court that Knoppke has registered against title to Krek’s property be removed. I agree that the terms of that Order no longer appear to be relevant and Krek’s title should not continue to be encumbered by it. Krek’s estate shall have an Order removing the 1997 Order from title.

[10] Counsel for Unifund submits that Knoppke’s conduct warrants an award of punitive damages. He points out that given Knoppke’s conduct in the underlying claim, together with his having agreed to, and then entirely ignored, the Settlement, this qualifies as a case that meets the Supreme Court’s description of “oppressive and high handed conduct that offends the Court’s sense of decency”: Hill v. Church of Scientology, [1995] 2 SR 1130, at para. 96.

[11] I do not disagree with that characterization. However, as I explained to counsel, I am reluctant to impose punitive damages on a party who is not in court to respond. Knoppke’s counsel has his hands tied due to lack of instructions, and Knoppke himself is missing in action. The punitive damages request, while understandable, is out of the ordinary. I do not want any reader of this endorsement to think that I condone Knoppke’s behaviour throughout this dispute, as I most emphatically do not. But I am not inclined to exercise my discretion to award punitive damages against a party who is not here to defend himself.

[12] That said, it is also within my discretion to award whatever level of costs I deem appropriate to the circumstances. Knoppke has put Unifund to an extraordinary level of unnecessary costs in this litigation. Ignoring the Settlement and failing to communicate with his own counsel in this motion is the latest straw. This conduct deserves some special attention by the Court. In my view, costs is the appropriate place to express the judicial system’s disapproval of this type of behaviour.

[13] On this motion alone, Unifund has incurred a total of $70,078.08 in legal fees and disbursements. I view this to be one of the rare instances where an award of full indemnity costs is fitting. In addition, the Krek estate seeks $3,515.84 in partial indemnity costs. As Krek’s counsel points out, Knoppke should have consented to removing the Order from title to the Krek property, since he was aware that the matters in relation to which it was registered are no longer relevant.

[14] Knoppke shall therefore pay Unifund costs in the all-inclusive amount of $70,078.08 in costs, and he shall pay the estate of Alex Krek the all-inclusive of $3,515.84 in costs.

[15] There will be an Order to go incorporating the several terms set out above. Counsel are to send a Word copy of their draft Order by email to my assistant.

Date: April 26, 2024 Morgan J.