CITATION: Richard Krawczyk v. Helen Theresa Evans et al, and Helen Theresa Evans v. Richard Krawczyk et al 2016 ONSC 1467
COURT FILE NO.: CV-12-112153 and CV-13-113045
DATE: 20160229
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Richard Krawczyk
Plaintiff/Defendant by Counterclaim
– and –
Helen Theresa Evans personally and in her capacity as Estate Trustee of the Estate of Antoni Krawczyk
Defendant/Plaintiff by Counterclaim
-and-
Krystyna Adams
Defendant/Plaintiff by Counterclaim
-and-
BETWEEN:
Helen Theresa Evans
Applicant
-and-
Susan M. Sack, for the Plaintiff/Defendant by Counterclaim
Jasmine Sweatman, for the Defendant/Plaintiff by Counterclaim
Acting for self, Defendant/Plaintiff by Counterclaim
Jasmine Sweatman, for the Applicant
Richard Krawczyk
-and-
Respondents
Susan M. Sack, for the Respondents
Krystyna Adams
Acting for self, the Respondent
HEARD: February 25, 2016
REASONS FOR dECISION
CHARNEY J.:
Introduction
[1] These motions concerns two separate but related proceedings. The first is an action by the plaintiff Richard Krawczyk (Richard) against his sisters, Helen Evans (Helen) and Krystyna Adams (Krystyna), in relation to the estate of their father (the estate). Richard claims that his sisters converted estate assets for their personal benefit and Helen has breached her fiduciary duties as the estate trustee. The claim relates primarily to a family cottage and other assets of their late mother that passed to the father when the mother predeceased the father. When the father died, the sisters took the position that he gifted the cottage and other assets to them and they did not form part of the estate. Richard seeks $2 million damages for conversion and declarations of resulting trust for the benefit of the estate with respect to the disputed assets.
[2] The Statement of Claim in this action was issued on November 28, 2012. His sisters filed a Statement of Defence and Counterclaim on January 4, 2013.
[3] The second proceeding is an Application to Pass Accounts (the Application) brought under Rule 74.18 of the Rules of Civil Procedure. The Application is brought by Helen, who was appointed as the estate trustee on February 18, 2011. Helen was ordered to file the accounts of the estate and bring an Application to Pass Accounts by court order dated November 1, 2012. The Application was brought on February 1, 2013.
[4] On March 5, 2013, Richard filed a Notice of Objection to Accounts.
[5] On April 2, 2013, the Court issued a consent order (the consent order) that the Application to Pass Accounts “be stayed until the final disposition of” the action.
[6] The consent order staying the Application until the final disposition of the action makes good sense. It will not be possible to pass the accounts until the trustee knows whether the disputed assets form part of the estate. Richard’s objections to the accounts reflect the claims made in the Statement of Claim, and the validity of these objections will depend on whether the disputed assets form part of the estate, which is an issue that will be determined in the action. If Richard is successful in the action, the accounts will have to be redone before the Application can proceed. If Richard is unsuccessful, many if not all of his objections will become irrelevant.
[7] The parties agree that (subject to appeal) each will be bound by the factual and legal findings made by the trial judge on the action when the Application is heard. To the extent that the objections raised in the Application are duplicative of the claims made in the action, the Application will be decided by the decision in the action.
[8] Indeed, the parties would be bound by findings and rulings in the action by virtue of the doctrine of res judicata or issue estoppel even if they did not agree. The three preconditions of issue estoppel are “whether the same question has been decided; whether the earlier decision was final; and whether the parties, or their privies, were the same in both proceedings” British Columbia (Workers’ Compensation Board) v. Figliola, 2011 SCC 52, [2011] 3 S.C.R. 422 at para. 27. In the present case the parties to the action are identical to the parties in the Application and the decision in the action will be a final decision. The only issue to be determined is whether the questions raised in the Application are the same as those raised in the action.
The Motions
[9] Richard brings two motions. The first is to amend the Statement of Claim. The second is to lift the stay of proceedings. I will deal with these separately.
Amendments to Statement of Claim
[10] Richard’s first motion is a motion in the action for leave to amend his Statement of Claim to “further particularize” the claim against his sisters Helen and Krystyna in relation to assets of their late mother that he alleges ought to have formed part of their father’s estate. Rule 26.01 of the Rules of Civil Procedure provides that the Court “shall grant leave to amend” a pleading “unless prejudice would result”.
[11] The sisters take the position that this amendment would add a new cause of action and that this new claim falls outside the two year limitation period in the Limitations Act, 2002. Notwithstanding this position, they recognize that the application of the limitation period to the facts of this case will be an issue that the trial judge will have to resolve, and they consent to the amendment provided they have an opportunity to file an amended statement of defence and a further trial record is served after the pleadings are closed.
[12] Accordingly, leave to amend the Statement of Claim in accordance with the draft Amended Statement of Claim appended as Schedule “A” to the Notice of Motion is granted, and the defendants are granted leave to file and amended statement of defence, which may include a limitation period defence. A further trial record will be served after pleadings are closed.
Lifting Stay of Proceedings
[13] The second motion is to lift the stay of proceedings (the consent order) “so as to validate the Amended Notice of Objection served on June 15, 2015, nunc pro tunc”.
[14] This second motion also requests an order that the application be tried “in whole or in part” at the same time as the action, or, alternatively, that the “action be tried with or at the same time as certain of the issues raised” in the Application.
[15] This second motion takes some explaining. The June 15, 2015, “Amended Notice of Objection” was a document that Richard attempted to file in the Application on June 15, 2015. The amendment adds the following objection to the Application to Pass Accounts: “The estate accounts do not include assets that were held jointly between the estate trustee and [the mother] which ought to have formed part of the estate of [the mother] and been distributed to the [father] upon her death.”
[16] Helen’s counsel took the position that since the Application was stayed Richard was prohibited from taking any procedural steps without leave of the court, which includes amending court documents such as the Notice of Objection. Accordingly, Richard seeks leave to make this amendment. Counsel for Helen also takes the position that there is no rule that permits the amendment of a Notice of Objection.
[17] Richard also takes the position that the stay should be lifted to permit “certain of the issues raised” in the Application to be tried and decided at the same time as the action. “Certain of the issues” is a rather cryptic description. Counsel for Richard explained that the phrase “certain of the issues” means the “common issues”.
[18] In my opinion neither of these grounds justifies lifting the stay.
[19] Dealing first with the proposal that the stay be lifted to permit the “common issues” in the action and Application to be tried and decided at the same time.
[20] In my opinion it is entirely unnecessary to lift the stay to permit the “common issues” to be tried and decided at the same time. The trial judge hearing this case will hear all of the issues raised in the Amended Statement of Claim (and the Amended Statement of Defence) that he or she considers necessary to decide the action. The “common issues” are the issues that can be found in both the Amended Statement of Claim and the Notice of Objection. Accordingly, there is nothing in the consent order that precludes the trial judge from deciding “common issues”. Given the doctrine of res judicata (and the agreement of counsel), the trial judge’s decisions on the “common issues” will be binding on the parties when the Application is heard.
[21] The parties may or may not agree on what those “common issues” are, but that is not something I can resolve in advance of the trial, and it may not even be something that can be resolved in advance of the Application. The trial judge will make his or her decision on the issues raised in the amended pleadings in the action, and the parties will be bound by those decisions when they argue the Application to the extent that those decisions determine legal or factual matters relevant to the Application. The effect of these legal and factual determinations on the issues in the Application will be a question for the parties to attempt to resolve in advance of the Application, and if they cannot, it will be a matter for the judge hearing the Application to decide. The judge hearing the Application will have to decide which, if any, issues are remaining in light of the prior decision in the action. This will happen whether or not I lift the stay to permit the “common issues” to be tried together.
[22] The second ground relates to the June 15, 2015 “Amended Notice of Objection”. Richard was precluded from filing this Amended Notice because of the stay of the application. Of course the stay remains in place only until the final disposition of the action, which is scheduled to be heard in just over two weeks. Once the decision in the action is released (assuming no appeal), the stay is lifted and Richard is free to make whatever amendments he wants to his Notice of Objection. It is not clear to me why these amendments must be made before the trial of the action, or why they have to be done nunc pro tunc.
[23] Helen takes the position that there is nothing in the Rules of Civil Procedure that permits an amendment to a Notice of Objection (see Rule 74.18(7) of the Rules of Civil Procedure). That may true, but Rule 1.04(4) states: “Where matters are not provided for in these rules, the practice shall be determined by analogy to them.” In a world where Statements of Claim and other pleadings are routinely amended, there is no logical reason why a Notices of Objection cannot be amended before the Application to Pass Accounts is heard. Indeed, the Notice of Objection does not even have to be filed until “at least 30 days before the hearing of the application” (Rule 74.18(7)). I also note that there is nothing in the Rules of Civil Procedure that permits the estate trustee to amend the Application to Pass Accounts, but that does not mean that it cannot be done. Depending on the outcome of the action, the Application may have to be amended in this case.
[24] Finally, the parties cannot agree on whether the trial record should include the Application to Pass Accounts and Notice of Objection. Since the action is based on the amended pleadings in the action, I do not see the utility of including the documents relating to the Application in the trial record. The trial judge does not need to see the Application material to understand or decide the issues raised in the action. Accordingly, I conclude that the Application material should not form part of the trial record. This decision is without prejudice to the either party raising the issue again before the trial judge, who is obviously free to order that it be included in the trial record if he or she is of the view that it would be of some value in the action.
Conclusion
[25] In conclusion, I am make the following order:
a. Leave to amend the Statement of Claim in accordance with the draft Amended Statement of Claim appended as Schedule “A” to the Notice of Motion is granted, and the defendants are granted leave to file an Amended Statement of Defence, which may include a limitation period defence. A further trial record will be served after pleadings are closed;
b. Leave to lift the stay of proceedings ordered April 2, 2013, is dismissed;
c. The Application material should not form part of the trial record. This decision is without prejudice to the either party raising the issue again before the trial judge, who may order that it be included in the trial record if he or she is of the view that it would be of some value in the action;
[26] The parties have agreed that costs of this motion will be determined by the trial judge.
Justice R.E. Charney
Released: February 29, 2016
CITATION: Richard Krawczyk v. Helen Theresa Evans et al, and Helen Theresa Evans v. Richard Krawczyk et al 2016 ONSC 1467
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Richard Krawczyk
Plaintiff
– and –
Helen Theresa Evans personally and in her capacity as Estate Trustee of the Estate of Antoni Krawczyk and Krystyna Adams
Defendants
-and-
Helen Theresa Evans
Applicant
-and-
Richard Krawczyk and Krystyna Adams
Respondents
REASONS FOR dECISION
Justice R.E. Charney
Released: February 29, 2016