Abrahamovitz et al. v. Berens et al.
[Indexed as: Abrahamovitz v. Berens]
2018 ONCA 252
Court of Appeal for Ontario, Laskin, K.N. Feldman and B. W. Miller JJ.A.
March 15, 2018
Limitations — Practice — Pleadings — Defendants managing rental
property owned in part by plaintiffs — Estate trustee of former manager discovering after his death in 2010 that plaintiffs had allegedly
signed acknowledgments which gave deceased interest in rental and
sales proceeds of property — Defendants holding back rental income
from plaintiffs after receiving notice of estate’s claim — Plaintiffs suing
in 2011 for funds held back — Defendants moving in 2016 for order adding estate as necessary party — Motion judge erring in finding that
estate’s claim was statute-barred — Estate’s claim being against defendants — Defendants not pleading limitations defence and plaintiffs not
having standing to take position on motion that estate’s claim was statute-barred — Estate a necessary party.
The plaintiffs were two of four shareholders of a holding company that owned
a commercial property. The property was managed by Z until he became ill in
2009. The plaintiffs purportedly signed acknowledgements in 2002 giving Z
a 25 per cent interest in their respective entitlements to rental and sales proceeds of the property. The defendants took over the management of the property
in 2009. Z died in 2010. His estate trustee discovered the acknowledgments in
2010 and brought them to the defendants’ attention, whereupon the defendants
held back rental income from the plaintiffs pending the resolution of the dispute.
The plaintiffs denied signing the acknowledgements. In 2011, they commenced
a claim against the defendants for payment of the rents collected by them.
In 2016, the defendants moved for an order under rule 5.03 of the Rules of Civil
Procedure, R.R.O. 1990, Reg. 194 adding the estate as a necessary party to the
action. The motion judge dismissed the motion on the ground that the estate’s
claim was statute-barred. The estate appealed.
Held, the appeal should be allowed.
The motion judge erred in finding that the estate’s claim was statute-barred.
The expiry of a limitation period does not render a cause of action a nullity;
rather, it is a defence and must be pleaded. The plaintiffs had not sued the
estate, and the estate had not sued the plaintiffs, as neither party had the rental
funds. There was no lis between the plaintiffs and the estate. The estate’s claim
was against the defendants. The defendants did not plead that the estate’s claim
was statute-barred, and that had never been their position. The plaintiffs did not
have standing to take the position on the motion that the estate’s claim was
statute-barred. The estate was a necessary party to the action to ensure that
it would be bound by the court’s determination of the issue of the validity of
Beardsley v. Ontario (2001), 57 O.R. (3d) 1,  O.J. No. 4574, 151 O.A.C.
324, 17 C.P.C. (5th) 94, 52 W.C.B. (2d) 45 (C.A.); Thoman v. Fleury (1996), 28 O.R.
(3d) 398,  O.J. No. 1265, 90 O.A.C. 227, 34 C.C.L.I. (2d) 161, 47 C.P.C. (3d)
196, 19 M.V.R. (3d) 183, 62 A.C. W.S. (3d) 457 (C.A.), consd