



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. Milmines 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. Milmines 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. Milmines 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:

1.  Stephen
    Milmine and Laurie Milmine were to hold the properties in trust for the Estate
    and the respondent;

2. The
    respondent had responsibility for managing the properties;

3.  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

4. 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 respondents 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 respondents 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.


