CITATION: Barcham v. Barcham, 2016 ONSC 634
COURT FILE NO.: CV-12-453188
DATE: 20160205
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LAZAR BARCHAM
Plaintiff
– and –
ALMAS BARCHAM and THE ESTATE of GEORGE BARCHAM
Defendants
Joel Etienne, for the Plaintiff
Robert Watt, for the Defendants
HEARD: January 8, 2016
lederman, j.
nature of motion
[1] The plaintiff, Lazar Barcham [“Lazar”], brings this motion for leave to amend his statement of claim and to adjourn the trial of this action which is set for February 16, 2016.
[2] In the original statement of claim, the plaintiff seeks a declaration that the defendants hold in trust for the plaintiff a one-third interest in certain property located in Mississauga, Ontario [the “Mississauga Property”].
[3] Lazar is the brother of George Barcham [“George”] who died on May 21, 2009. George was the owner of a property on Evans Avenue. In the statement of claim, Lazar alleges that he contributed monies towards the upkeep, maintenance and payment of all mortgages and taxes on the Evans Avenue property. Lazar also alleges that George intended that Lazar hold a one-third interest in the Evans Avenue property and confirmed this to Lazar many times.
[4] Lazar pleads that when the Evans Avenue property was sold, monies from that sale were used to purchase the Mississauga Property. Lazar states that when George died, the defendants became constructive trustees for Lazar with respect to the one-third interest in the Mississauga Property.
[5] Lazar now seeks to amend his statement of claim on the basis of a discovered holograph will of the deceased George, which entitles Lazar to a full interest in his deceased brother’s estate. Lazar also wishes to bring a process for the revocation of the Certificate of Appointment of Estate Trustee in the name of the defendant, Almas Barcham. Lazar has issued a notice of application for the revocation of the Certificate of Appointment.
[6] Lazar also seeks an adjournment of the trial so that he can amend his statement of claim to accurately set out the relief he is seeking on the basis of the discovered holograph will.
[7] Lazar submits that he is moving to amend his statement of claim merely to particularize the alternative relief he is seeking. The defendants, on the other hand, argue that the proposed amendments to the statement of claim are not merely in the nature of relief, but that the plaintiff is attempting to plead an entirely new cause of action. The defendants take the position that this new cause of action is now statute-barred and an amendment should not permitted.
BACKGROUND
[8] In a will executed in 1995, the deceased, George, named his wife, Almas Barcham, [“Almas”] as Estate Trustee and sole beneficiary.
[9] Five years later, in 2000, Lazar claims, George drafted a holograph will. He also made oral representations to Lazar that he intended to give him an interest in the estate. George gave Lazar a folded copy of the holograph will. Out of respect for his brother’s privacy, Lazar states, he did not look at the contents of the will and stored it for safekeeping somewhere in his home.
[10] On May 21, 2009, George died. Almas was granted a Certificate of Appointment as Estate Trustee, and she proceeded to distribute George’s estate as directed by the 1995 will.
[11] Lazar states that he could not, try as he might, find the holograph will. He states that he searched through papers, files, briefcases, bags and cabinets in his home to no avail.
[12] Not knowing the contents or location of the holograph will, Lazar commenced civil proceedings against Almas on May 8, 2012, claiming a one-third interest in the Mississauga Property, without reference to the holograph will.
[13] Lazar states that when he initially retained his former counsel and started this action he advised him that there was a holograph will in existence which George signed subsequent to his 1995 will, but that Lazar could not locate it. Although Lazar told his counsel that he was concerned about the authenticity of the 1995 will in light of this holograph will, his former lawyer discounted his concerns and did not challenge the probate of the 1995 will.
[14] In January, 2015, Lazar’s original lawyer ceased representing him.
[15] In May, 2014, Lazar states that he located the holograph will which provides that Lazar is entitled to full interest in the Mississauga Property as well as any investments and money in George’s bank accounts and so advised his new counsel. How Lazar managed to find the holograph will is not explained in the written record.
[16] In October, 2015, Lazar issued an application to have Almas’ Certificate of Appointment revoked and to have the holograph will declared George’s last will and testament.
PLAINTIFF’S POSITION
[17] Lazar takes the position that granting leave to amend would be a just course of action in this case. He relies on rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides:
Courts shall grant leave to amend a pleading unless prejudice would result that could not be compensated for by a costs award or adjournment.
[18] Lazar’s position is that the amendments he proposes do not assert a new cause of action. Rather, they permissibly clarify the pleadings and particularize his original claims by setting out an alternative claim for relief: Morgan v. Economical, 2013 ONCA 369; Ascent Inc. v. Fox 40 International Inc., [2009] O.J. No. 2964 (SCJ). Lazar argues that granting this motion would not result in non-compensable prejudice to the defendants because his alternative claim for relief arises out of the same set of facts that were originally pleaded.
[19] Lazar adopts the alternative position that, if this court finds his proposed amendments would assert an entirely new cause of action, the principle of discoverability bears on the granting of his motion. Lazar relies heavily on the decision of Master Dash in Wakelin v. Gourley 2005 23123 (ON SC), [2005] O.J. No. 2746 aff’d [2006] O.J. No. 1442 (Div. Ct.) to advance the position that he has met the evidentiary burden required to obtain leave to amend his pleadings. He submits that the record supports a finding that he exercised due diligence in locating the holograph will. He points to the length of time that elapsed between his receipt of the will and his brother’s death, and to the fact that he took all reasonable steps once he did find it to notify his counsel. He submits that an amendment to the pleadings is necessary for him to properly advance his claim and for the court to conduct an adjudication on the merits.
DEFENDANTS’ POSITION
[20] The defendants oppose granting leave to Lazar to amend his pleadings because of the prejudice this will cause them. They, too, rely heavily on Master Dash’s analysis in Wakelin v. Gourley. In the defendants’ submission, Lazar had actual knowledge of the existence of the holograph will at the time of George’s death, and yet he did nothing to challenge the validity of George’s 1995 will or the distribution of his estate according to its terms.
[21] The defendants also challenge the credibility of Lazar’s assertion that he simply could not locate the holograph will despite his good faith efforts. The assertion does not accord with Lazar’s suggestion that he placed the will in a location for safekeeping when he originally received it.
[22] In the defendants’ submission, Lazar seeks to amend his claim to start a new action on different facts and issues. The prejudice that would flow to the defendants from the plaintiff commencing brand new litigation would be significant. This prejudice is not compensable through an award of costs or an adjournment. A trial on the merits would be further delayed. The legal costs to the defendants would be duplicated. The defendants would face the possibility of having to claw back the entirety of the previously distributed assets of the estate including the property where the defendant Almas now resides. The defendant, Almas, would suffer further financial hardship and face emotionally draining litigation on new issues for some time to come.
[23] The new cause of action that Lazar wishes to assert is statute-barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, in the submission of the defendants. Rule 26.01 does not contemplate the addition of additional, statute-barred claims by way of an existing statement of claim. Lazar cannot circumvent the limitation period by grafting this new cause of action onto the first. Lazar knew of the existence of the holograph will when he retained his first lawyer and launched the current action in 2012. Moreover, he did nothing to assert a claim based on the holograph will within the two year limitation period following the death of George. Lazar’s failure to comply with the limitation period gives rise to a presumption of prejudice which the plaintiff must rebut. The defendants submit that he has not done so.
WAKELIN V. GOURLEY
[24] In Wakelin v. Gourley, Master Dash set out the approach to motions for an amendment to pleadings after the expiry of a limitation period. In that case, the moving party wished to amend his statement of claim to add third parties as defendants three years after the expiry of the limitation period. The plaintiff had been injured in a motor vehicle accident. He submitted that he did not know, and could not reasonably have known, the identity of the third party defendants until the defendant’s counsel sent his lawyer a copy of the pleadings in the defendant’s claim against the other parties.
[25] Master Dash articulated an approach to motions of this kind that avoids the court acting as a “rubber stamp” to requests to amend pleadings. In his assessment, granting leave to amend should not be automatic.
[26] Yet, at the motions stage, a plaintiff’s burden is quite low: he or she need only demonstrate that there is an issue of fact or credibility as to his or her due diligence, which is a constituent element of an allegation of discoverability. At para. 15 of Wakelin, Master Dash observed:
Therefore, as long as the plaintiff puts in evidence as to steps taken to ascertain the identity of the tortfeasors and gives a reasonable explanation on proper evidence as to why such information was not obtainable with due diligence then that will be the end of the enquiry and the defendants will normally be added with leave to plead a limitations defence… If there is any doubt whether the steps taken by the plaintiff could not amount to due diligence then this is an issue that must be resolved on a full evidentiary record at trial or on summary judgment.
[27] In order to succeed in a motion to amend pleadings after the expiry of the limitations period, a plaintiff must demonstrate that there was a triable issue of discoverability. Discoverability will be in issue if a plaintiff demonstrates that he exercised due diligence. The plaintiff must give a reasonable explanation on proper evidence as to why the material evidence was not obtainable with due diligence.
[28] A motion to amend pleadings after the expiry of a limitation period should be refused if the plaintiff is unable to demonstrate the existence of a triable issue of fact or credibility relating to discoverability. However, any issues of fact or credibility successfully raised by the plaintiff require evaluation on a full evidentiary record at trial or on a motion for summary judgment. In the latter event, leave to amend should be granted, and the defendants will be granted leave to plead a limitations defence.
[29] Prejudice to the defendant enters the analysis here: even if the plaintiff fails to demonstrate that he acted with due diligence in discovering the evidence that is the subject of the amendment, the court retains a residual discretion to grant a motion to amend, provided that there is an absence of non-compensable prejudice to the opposing party.
ANALYSIS
[30] The amendments proposed by Lazar seek, on the basis of the holograph will, to
(a) set aside the court appointment of Almas as Estate Trustee;
(b) set aside the 1995 will;
(c) set aside the distribution of the assets of George’s estate;
(d) request a finding that the holograph will stand as George’s last will and testament over the 1995 will;
(e) request a finding that Lazar is the sole beneficiary of George’s estate.
[31] These amendments sought by Lazar raise a new cause of action not set out in the statement of claim. They raise a completely new cause of action based on new facts and the holograph will and seeking new relief. The proposed amendments are not simply an alternative claim for relief.
[32] The record on this motion does not disclose a triable issue as to whether Lazar acted with due diligence. Lazar’s explanation for why he is seeking, at this late stage of the proceedings, to amend his statement of claim demonstrates a resounding lack of due diligence on his part. His explanation as to how he misplaced, and subsequently rediscovered, the holograph will could be characterized as “patently ridiculous”: Wakelin v. Gourley at para. 6.
[33] Moreover, Lazar offers no explanation as to why he failed to challenge the validity of the 1995 will after the death of his brother, despite his evidence that he knew the holograph will existed in 2000 when George gave it to him. He asks this court to believe that he took no action to assert his legal claims despite his knowledge that the subsequent holograph will contained different terms than the previous one, including his alleged beneficiary status. At a minimum, due diligence would have required Lazar to notify the court and the Estate Trustee that the 1995 will may not have been George’s last will and testament. He did nothing. To the extent that Lazar states that he did alert his original lawyer to the existence of the holograph will but that his lawyer did nothing about it, Lazar may be entitled to a remedy against him, but it cannot be to the prejudice of the defendants.
[34] Lazar asserts that he was simply unable to locate the holograph will at the time of his brother’s death, and that he was unsuccessful in locating it when he issued his original statement of claim in 2012. He offers no explanation as to what led him to find the will in 2014, or where it had been stored. The court is not required to accept the plaintiff’s evidence of his asserted due diligence simply because his burden on a motion to amend is low. Lazar’s implausible submissions do not clear this low threshold.
[35] The court has residual discretion to permit the amendment, even if the plaintiff fails to establish an issue as to discoverability. However, that discretion is constrained by the presence of prejudice to the opposing parties.
[36] Both actual and potential prejudice will be visited on the defendants if Lazar is successful on this motion. An adjournment to allow for the pleadings to be amended would result in further delay and increased legal costs to both sides. Permitting the changes to the pleadings would expose the defendants to the risk that the previously distributed assets of the estate be required to be transferred to Lazar. The assets of the estate include the home in which Almas currently resides. This result is not inevitable, but the possibility of the action being disposed of in such a way upends the principles of judicial certainty and finality that Ontario’s statute of limitations is designed to preserve.
[37] Lazar proposes to plead a new cause of action. If his action were to be advanced in an entirely new statement of claim, it would be statute-barred. Permitting new causes of action to be pleaded via existing claims is not the rationale for rule 26.01, especially where those claims are made outside of the limitation period. The principle of discoverability does not assist the plaintiff on this motion. It is designed to permit amendments to pleadings where it could not reasonably have been known, even with a plaintiff’s due diligence, that evidence existed which would warrant a new cause of action to be commenced. That is not the case on this motion.
CONCLUSION
[38] By way of summary, where a limitation period has expired, prejudice to the responding party is a factor that the court must consider in exercising its residual discretion.
[39] Even if Lazar has failed to raise an issue as to discoverability, which is a low burden at motion stage, the court nevertheless has a discretion to permit an amendment provided that there is an absence of non-compensable prejudice to the responding party.
[40] The plaintiff has not met the low burden of raising an issue as to discoverability. The court’s discretion should not be exercised to grant leave to amend in this case because the defendants will face prejudice for which they cannot be compensated through an adjournment or an award of costs.
[41] The motion is therefore dismissed.
[42] The defendants will have their costs fixed at the agreed upon amount of $3,000 all inclusive, payable by the plaintiff within 30 days.
Lederman J.
Released: February 5, 2015
CITATION: Barcham v. Barcham, 2016 ONSC 634
COURT FILE NO.: CV-12-453188
DATE: 20160205
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LAZAR BARCHAM
Plaintiff
– and –
ALMAS BARCHAM and THE ESTATE of GEORGE BARCHAM
Defendants
REASONS FOR JUDGMENT
Lederman J.
Released: February 5, 2016