2015 QCCA 1928, 2015 QCCA 1928

Palnick c. Ben-Zion Rosenfeld (Estate of) 2015 QCCA 1928 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-024565-145 (500-17-070506-129) MINUTES OF THE HEARING DATE: October 29, 2015 CORAM: THE HONOURABLE FRANÇOIS PELLETIER , J.A. NICHOLAS KASIRER , J.A. DOMINIQUE BÉLANGER , J.A. APPELLANT ATTORNEY JUDITH ROBIN PALNICK M e VINCENT KALTENBACK ( Barrette & Associés Avocats inc. ) RESPONDENT ATTORNEY ESTATE OF GDALYAH BEN-ZION ROSENFELD Me JANET MICHELIN ( Irving Mitchell Kalichman SENCRL/LLP ) IMPLEADED PARTY ATTORNEY KENNETH F. SALOMON LARRY MICHAEL PALNICK JEFFREY ALAN PALNICK

On appeal from a judgment rendered on June 11, 2014 by the Honourable Mr Justice Brian Riordan of the Superior Court, District of Montreal DESCRIPTION : Succession – prescription Clerk: Shirley Thomas Courtroom: Pierre-Basile-Mignault HEARING 9:30 Commencement of the hearing.

Identification of counsel. 9:31 Representations by Mtre Kaltenback. 9:50 Recess. 9:53 Resumption of the hearing. 9:54 Exchange between François Pelletier, J.A. and Mtre Kaltenback. 10:08 Recess 10:17 Resumption of the hearing. 10: 18 By the Court: Pour les motifs qui seront déposés au procès-verbal, la Cour: REJETTE la requête, avec dépens; REJETTE l’appel, avec dépens. 10: 18 Conclusion of the hearing.

SHIRLEY THOMAS Clerk BY THE COURT JUDGMENT THE FOLLOWING ARE THE REASONS FOR THE JUDGMENT OF THE COURT RENDERED AT THE HEARING: [ 1 ] Judith Palnick has appealed a judgment of the Superior Court, District of Montreal, (the Honourable Brian Riordan), rendered on June 11, 2014, which granted a motion to dismiss filed by the Estate of Gdalyah Rosenfeld. The judge held that the action was prescribed and, as a result, dismissed the appellant’s motion to institute proceedings against the respondent.

[ 2 ] The appellant also petitions to amend her inscription in appeal and her memorandum to add a subsidiary ground of appeal pursuant to

article 199 C.C.P. *** On the motion to amend: [ 3 ] The appellant argues that

article 2882 C.C.Q. allows her to raise her claim as a ground of defence even if it is prescribed because the Rosenfeld estate is owed an amount of $40,000 from the Palnick estate.

Given that the claims arose contemporaneously, the appellant says she can avail herself of judicial compensation between the amount due to the Rosenfeld estate from the Palnick estate and the amount claimed by her, as an heir of the Palnick estate, from the Rosenfeld estate. [ 4 ] The Court disagrees. [ 5 ] The motion to amend would result in the appellant asserting a claim that has no direct connection with the $40,000 demand for payment made by the Rosenfeld estate against the Palnick estate.

This latter debt is relevant to separate proceedings instituted by Mtre Solomon in homologation of his account of administration of the Palnick estate. On the other hand, the claim that the appellant asserts against the Rosenfeld estate is made in proceedings brought in her own name, not in name of the Palnick estate, and relates to allegations that the conduct of the late Mr Rosenfeld caused her harm. Contrary to what the appellant suggests, the fact that there are different creditors and debtors means that there would be no compensation between the claims here. [ 6 ] The appellant has failed to convince us that

article 2882 C.C.Q. applies in the circumstances. She invokes this unconnected argument as a means of reviving a cause of action that is prescribed, a matter expressly prohibited by

article 2882, para. 2 C.C.Q. [ 7 ] The motion to amend must be therefore be dismissed. On the merits of the appeal: [ 8 ] From 2001 to 2009, Mr Rosenfeld acted as liquidator of the Palnick estate of which the appellant is an heir. In 2009, he sent a letter to the three universal legatees informing them that he was in bad health and that he would resign his charge as of August 31, 2009.

At that time he wrote that he had given instructions to the accountants of the Palnick estate to prepare a final accounting of his administration. [ 9 ] On or about March 24, 2014, the appellant filed a proceeding entitled “Response to the amended declaration of voluntary intervention and Motion introducing a suit against the impleaded party” in an action brought against the current liquidator of the Palnick estate.

In “Response” proceeding, she sought to bring a further suit against the respondent, as impleaded third party, alleging that Mr Rosenfeld acted improperly, while he was liquidator, in concert with the other heirs, Larry and Jeffery Palnick. [ 10 ] In the conclusions of that proceeding, the appellant asked the Superior Court to condemn the other heirs and the Rosenfeld estate “to pay jointly to [her] a sum of $255,000” with interest and the additional indemnity.

She did not explicitly ask for the respondent to render an account of the late Mr Rosenfeld’s liquidation. *** [ 11 ] The respondent presented a motion to dismiss the appellant’s suit against the Rosenfeld estate, arguing that it was prescribed. Respondent argues that it is an action in damages subject to a three-year prescription period established in

article 2925 C.C.Q. Prescription is said to have commenced no later than when Mr Rosenfeld ceased to be liquidator on August 31, 2009. The claim was thus prescribed on August 31, 2012 and, as a result, the action, filed in March 2014, should be dismissed. [ 12 ] The judge granted the motion to dismiss because the claim was prescribed. He noted that the proceedings were instituted more than three years after the date at which Mr Rosenfeld ceased to be liquidator.

The judge rejected the appellant’s argument that a ten-year prescription period should apply to the amounts claimed, “since, in essence, they appear to be simply damages or accountings”. He concluded that a personal right was being exercised and applied the three-year prescription period established by law. *** [ 13 ] On appeal, the appellant argues that the judge was mistaken in determining that a three-year prescription period applied.

In her view, the proper prescription period is that applicable to an action for a rendering of account by the liquidator of a succession which, she argues, is ten years pursuant to

article 2922 C.C.Q. In the present case, the true nature of the loss suffered by the appellant can only be ascertained, she says, after a rendering of account such that the suit is not prescribed. [ 14 ] The Court disagrees. [ 15 ] The three-year prescription period set forth in

article 2925 C.C.Q. for the exercise of a personal right applies in this case. The appellant’s personal action in damages against the Rosenfeld estate is prescribed. [ 16 ] The conclusions sought in the motion to institute proceedings against the respondent are limited to a condemnation that the Rosenfeld estate, jointly with the other heirs, pay damages to the appellant. The damages are specified in paragraph 54 of the proceeding as the consequence of improper conduct on the part of the Mr Rosenfeld and the other heirs. Even the claim for improper expenses incurred by the estate is claimed from Mr Rosenfeld personally.

[ 17 ] While the fact that Mr Rosenfeld did not render account for his administration of the Palnick estate is indeed raised in the motion, the appellant did not ask the Superior Court to order an accounting. Moreover, we disagree that a request for a rendering of account is necessarily implicit in the conclusions sought by the appellant. The claim in damages is for alleged losses suffered as a result of the supposed misconduct of Mr Rosenfeld and has no necessary relationship with the obligation to render an account.

An accounting is not a condition precedent to this claim in damages. [ 18 ] In the circumstances, the three-year prescription period for damages suffered by an heir for the allegedly improper conduct of a liquidator applies in

article 2925 C.C.Q. because the right of action is a personal one, based in civil liability, brought against a liquidator for an alleged failure to respect his duties in the management of the estate. [1] [ 19 ] Because the action is not directly or indirectly one for the rendering of account, it is not necessary to decide whether or not, in the circumstances, a ten-year prescription period applies to an action for a rendering of account. [2] We refrain from so doing.

In our respectful view, it was not necessary for the judge to decide the question. [ 20 ] These are the reasons for which the Court, at the hearing, dismissed the appellant’s motion to amend, with costs, and dismissed the appeal, with costs. FRANÇOIS PELLETIER, J.A. NICHOLAS KASIRER, J.A. DOMINIQUE BÉLANGER, J.A.