COURT OF APPEAL FOR ONTARIO
RE: GERALD M. STREISFIELD, LILLIAN STREISFIELD CRAIG STREISFIELD, JEFFREY STREISFIELD, STEPHEN STREISFIELD, SHERYL STREISFIELD and MARLA STREISFIELD BORENSTEIN (Plaintiffs) (Appellant, Respondent by way of cross-appeal) – and – MARVIN GOODMAN, CAROL GOODMAN, JOYCE LAWEE, DAVID LAWEE and JEAN KARNOVSKY (Defendants) (Respondents, Appellants by way of cross-appeal)
AND RE: MARVIN GOODMAN, JOYCE LAWEE and JEAN KARNOVSKY (Plaintiffs by Counterclaim) (Respondents, Appellants by way of cross-appeal) – and – GERALD M. STREISFIELD, LILLIAN STREISFILED, CRAIG STREISFIELD, JEFFREY STREISFIELD, STEPHEN STREISFIELD, SHERYL STREISFIELD and MARLA STREISFIELD BORENSTEIN, 489223 ONTARIO LIMITED (carrying on business as "Field Construction 1982"), THE PUBLIC GUARDIAN AND TRUSTEE and LEONARD WEISTEIN (in his capacity as Estate Trustee during litigation of the Estate of Dora Herberman, deceased) (Defendants to the Counterclaim) (Appellant, Respondent by way of cross-appeal)
BEFORE: LABROSSE, WEILER and CHARRON JJ.A.
COUNSEL: Ronald B. Moldaver, Q.C. for the appellant, respondent by way of cross-appeal
Robert A. Watson for the respondents, appellants by way of cross-appeal
HEARD: May 6, 2004
On appeal from the judgment of Justice James Carnwath of the Superior Court of Justice dated January 17, 2002.
E N D O R S E M E N T
Background
1This action arose out of a dispute between family members over the will and the assets of the deceased Dora Herberman. The dispute was resolved by trial before Carnwath J., resulting in a judgment dated January 17, 2002. The appellant, Jeffrey Streisfield appeals from that judgment. The respondents cross-appeal on one discrete issue. The trial judge’s comprehensive findings of fact are not in dispute. They are set out fully in the trial judgment, reported at (2001), 40 E.T.R. (2d) 98. In order to dispose of the issues before this court, it is only necessary to refer to some of the facts.
2Dora Herberman died in July 1993 at the age of 91. On March 30, 1990, Herberman executed a will. Under its terms, the plaintiff Gerald Streisfield (now deceased) and the defendant Marvin Goodman were appointed executors of the estate, and members of the Streisfield family were residuary legatees. Marvin Goodman renounced his position as executor in November 1994.
3In May 1996, the Streisfield family brought an action to have Herberman’s 1990 will declared valid. The defendants contested the validity of the 1990 will and counterclaimed to have Herberman’s earlier will, dated January 6, 1977, declared valid. Under that will, other persons who are not parties to this action were named as executors and the respondent Jean Karnovsky was one of the residuary legatees. The respondents also counterclaimed for a return to the estate of assets they alleged had been wrongfully taken from the deceased by members of the Streisfield family.
4The trial judge found that a conspiracy existed among Gerald Streisfield, his wife Lillian, and their two children, Craig and Jeffrey, to defraud Herberman of her money and her house. In furtherance of this conspiracy and by the exercise of undue influence, members of the Streisfield family obtained from the elderly Herberman a transfer of her house to Lillian Streisfield; a power of attorney appointing Craig Streisfield as attorney; a transfer of over $300,000 in various cheques payable to members of the Streisfield family; and the 1990 will that benefited the Streisfields to the detriment of the beneficiaries in the earlier will.
5As a result of those findings, the trial judge dismissed the action to declare the 1990 will valid and declared the 1977 will as Herberman’s last will and testament. The trial judge also set aside the transfer of the house to Lillian Streisfield and ordered that the interest in the property be vested in the estate; he held the appellant Jeffrey Streisfield liable, jointly and severally with other members of his family, for the repayment of monies wrongfully obtained from Herberman; and he ordered the Estate of Gerald Streisfield and Lillian Streisfield to pay to the estate occupation rent with respect to Herberman’s house.
6Jeffrey Streisfield appeals from the finding of liability to pay to the estate of Dora Herberman the sum of $325,154.10 plus prejudgment interest and costs on a solicitor and client scale. The respondents cross-appeal from the dismissal of their counterclaim for occupation rent as against Jeffrey Streisfield.
7The appellant essentially raises two arguments on appeal. First, he argues that the respondents did not have standing to bring a counterclaim for the return of the deceased’s assets and for occupation rent. Second, he submits that the trial judge erred in finding him liable in the absence of any causal connection between his actions and the loss to the estate.
8On the cross-appeal, the respondents argue that the quantum of the judgment should be increased to reflect the loss in occupation rent caused by the taking of the deceased’s house. They submit that the trial judge erred in refusing to make this order as against Jeffrey Streisfield on the basis that he had moved out of the house before the relevant time period. They contend that the appellant’s knowing participation in the unlawful scheme to divest the deceased of her assets was sufficient to ground a finding of liability for occupation rent.
Analysis
Analysis
9With respect to the first ground of appeal, the appellant seeks to rely on s. 38 of the Trustee Act, R.S.O. 1990, c. T.23. He submits that the respondents did not have standing to bring their counterclaim because under that provision, only an executor or administrator of a person’s estate may maintain an action for tort or injury to the person or property of a deceased person. He also submits that s. 38(3) provides that any such action must be brought within two years from the death of the deceased. Hence, even if the counterclaim had been brought by the proper party, he argues that it was prescribed because it was commenced after the two year limitation period had expired.
10We are not prepared to entertain the appellant’s argument on the first ground of appeal.
11First, although the question of standing was pleaded, it was never raised at trial, and perhaps understandably so. On the face of the existing record, there is no reason to believe that the proper parties were not before the court. It is noteworthy that both executors named under the impugned 1990 will were parties to the action, although one had renounced his position sometime before the action was commenced. More importantly, the parties to the action were determined by order of Greer J. on a motion for directions brought on March 7, 1996, just prior to the commencement of the action in May 1996. The parties to the action include the Public Guardian and Trustee and Leonard Weinstein in his capacity as Estate Trustee During Litigation. Finally, the counterclaim, in its substance, was brought solely on behalf of Herberman’s estate. In these circumstances, we are not prepared to give effect to the standing argument for the first time on appeal.
12Second, on the question of the expiry of the limitation period, this affirmative defence was not even pleaded. It is well established that a limitation period must be raised as an affirmative defence at the pleadings stage: see rule 25.07(4) and, for a recent decision of this court, Strong v. M.M.P. (2000), 2000 16831 (ON CA), 50 O.R. (3d) 70 (C.A.). Again, we are not prepared to give effect to this argument for the first time on appeal.
13With respect to the second ground of appeal, the appellant argues that there was no causal connection between his actions and any loss to the estate and that, further, he did not receive any of Herberman’s assets. In the circumstances, he submits that the trial judge’s finding of liability against him has no basis in law.
14We do not agree. The basis of the trial judge’s decision is that Jeffrey Streisfield knowingly assisted in Gerald and Craig Streisfield’s breach of fiduciary duty to Herberman. Jeffrey Streisfield knew all the circumstances from which they had a fiduciary duty. Jeffrey prepared the power of attorney designating Craig as attorney. He took the power of attorney to Herberman knowing that Herberman trusted him as the family lawyer and that she was incompetent. He used Herberman’s trust in him to procure her signature. Once the power of attorney was signed it was taken to the bank and the bank disclosed that Herberman had approximately $250,000. The other Streisfields used that information to get the benefit of that money. Jeffrey Streisfield commissioned Herberman’s signature on the Land Transfer Tax affidavit when the Torresdale property was transferred to his mother Lillian. These are but examples of his knowing assistance. There is no basis for interfering with the trial judge’s holding that Jeffrey’s actions facilitated Gerald and Craig’s breach of fiduciary duty. There was a causal connection between the breach of fiduciary duty and the damage that occurred.
15For these reasons, the appeal is dismissed.
16On cross-appeal, the respondents submit that, because Jeffrey knowingly assisted in Herberman’s loss of the house, he should also be liable for the occupation rent.
17Although this position is arguable at law, we would not give effect to it. Based on the findings of fact concerning the nature and extent of participation by Jeffrey Streisfield, it is our view that it was within the trial judge’s purview to limit the scope of his liability to the repayment of monies wrongfully obtained from Herberman and to decline to order the payment of occupation rent. We would not interfere with the exercise of that discretion. Consequently, the cross-appeal is dismissed.
Costs
18The respondents are entitled to their costs, fixed in the amount of $17,500 inclusive of G.S.T. and disbursements.
Signed: “J.M. Labrosse J.A.”
“K.M. Weiler J.A.”
“Louise Charron J.A.”