Ottawa, Ontario, December 20, 2006
PRESENT: THE HONOURABLE MR. JUSTICE ROBERT L. BARNES
BETWEEN:
and
HER MAJESTY THE QUEEN
REASONS FOR ORDER AND ORDER
[1] This matter was heard in London, Ontario on November 21, 2006 and involved two competing motions. The Plaintiff, Grant Wilson, sought an Order pursuant to Rule 8 granting him an extension of time to bring an appeal from the Order of Prothonotary Milczynski which dismissed his action against the Defendants. The Defendants moved for an Order under section 40(1) of the Federal Courts Act, R.S.C. 1985, c. F-7 to bar the Plaintiff from continuing with this action or from instituting any further proceedings against them except with leave of the Court.
Procedural Background
[2] Mr. Wilson has had a long-running dispute with Revenue Canada which came to life in 1991 after Revenue Canada reversed a tax refund payment in the amount of $495,159.06 and removed those funds by way of Third Party Demand from his account with Canada Trust.
[3] Revenue Canada has consistently maintained that the refund payment was made in error because Mr. Wilson owed more than that amount in tax arrears and he was, therefore, entitled only to a tax credit against those arrears. Mr. Wilson saw it otherwise but it was not until 1999 that he brought an action (the 1999 action) against Revenue Canada seeking recovery of the tax refund, damages of $60,000,000.00 for unlawful interference with economic interests and punitive damages of $1,000,000.00. In the Amended Statement of Claim issued in the 1999 action, Mr. Wilson alleged that the Defendants’ 1991 seizure of the tax refund was unlawful and that it effectively caused the bankruptcy of his Canadian company, GRW Industries (1985) Limited, and the loss of “substantial personal assets”.
[4] I will not unduly belabour the history of the 1999 action because it is well-documented in previous decisions of this Court. It is sufficient to note that this action was dismissed by the Order of Justice James Hugessen on July 16, 2003. That dismissal was based on Mr. Wilson’s failure to properly answer questions or to fulfil undertakings on discovery. It is also undisputed that Mr. Wilson failed to appear for the hearing before Justice Hugessen although he had been properly served with the motion materials. Justice Hugessen’s Order stated in part:
The plaintiff has repeatedly failed to answer proper questions on discovery, to give any or proper answers to undertakings and to produce documents as required; orders from the Court appear to have no effect upon him. The defendant’s motion is accordingly allowed with costs to be assessed and the action is dismissed with costs.
[5] Mr. Wilson did not immediately appeal the Order of Justice Hugessen. Instead he moved for an Order for reconsideration, albeit that he waited for 14 months before doing so. That motion was based on Mr. Wilson’s allegation that his failure to appear on the motion before Justice Hugessen was the fault of his legal counsel. Justice Anne Mactavish dealt with that motion and, on November 25, 2004, she ruled against Mr. Wilson. Her reasons describe the proceeding to that point as “long and tortuous” and she duly noted Mr. Wilson’s failure to answer proper questions and to fulfil discovery undertakings. She also noted his failure to abide by the Orders of Prothonotary Roger Lafrenière compelling responses to questions which he had refused to answer during previous examinations for discovery. After reviewing the history of Mr. Wilson’s dealings with legal counsel, Justice Mactavish concluded that Mr. Wilson’s failure to respond to the Defendants’ dismissal motion was not the result of a mistake. In addition, she held that Mr. Wilson had failed to establish a prima facie case for setting aside Justice Hugessen’s Order. She found that the record demonstrated “a history of delay, obstruction and non-compliance on the part of Mr. Wilson”.
[6] Mr. Wilson did nothing for more than 5 months but eventually he got around to bringing a motion for reconsideration of Justice Mactavish’s Order based on supposed newly discovered evidence. Justice Mactavish again ruled against Mr. Wilson and found that the so-called “new” evidence had previously been in Mr. Wilson’s possession. If that evidence had been lost as he alleged, she found that it still could not be fairly described as undiscoverable. She then went on to hold that the “new” evidence would not have altered her earlier decision even if she had seen it at the time of the first reconsideration motion.
[7] Mr. Wilson then sought an extension of time to appeal the dismissal of his 1999 action. That motion was denied with costs by the Order of Justice Gilles Létourneau of the Federal Court of Appeal on December 8, 2005. The recitals in that Order include references to Mr. Wilson’s conduct before the Court as “an abuse of the process of the Federal Court” which “ought not to be condoned”.
[8] The record pertaining to the 1999 action also reflects a litany of problems with service of documents upon Mr. Wilson caused, in large measure, by his numerous changes of address, by his use of a forwarding address and by his frequent changes of legal representation. He also has several outstanding costs orders arising out of that proceeding.
[9] Having essentially reached the end of the road in the 1999 action, Mr. Wilson brought a second action against the Defendants on November 13, 2005 (the 2005 action). As with his pleadings in the 1999 action, the Statement of Claim issued in the 2005 action focussed primarily on the seizure of Mr. Wilson’s tax refund in 1991. Both sets of pleadings include a claim for the recovery of those funds and describe the Defendant’s seizure action as unlawful, wrongful, illegal, or contrary to law. In both actions, Mr. Wilson’s claim to exemplary or punitive damages is grounded in allegations of tortious or unlawful interference with his economic interests stemming from the 1991 seizure of his tax refund.
[10] The only arguable substantive differences between the pleadings in the two actions are freshly pleaded but vague allegations concerning a 2005 Notice of Assessment issued by Revenue Canada in June, 2005 and allegations of misrepresentations made by the Defendants or their counsel to the Court in connection with the 1999 action.
[11] In the face of the substantial overlap between the allegations pleaded by Mr. Wilson in the 1999 and 2005 actions, the Defendants brought a motion to strike out the 2005 Statement of Claim under Rule 221 on the grounds that the pleading was frivolous, vexatious, an abuse of process and raised issues that had been previously determined (ie. res judicata). That motion was dealt with in writing by Prothonotary Milczynski who ruled as follows:
That first action, was dismissed by Justice Hugessen by order dated July 16, 2003. Various requests for reconsideration and an attempt at an appeal of that dismissal have been pursued, all without success. I find in that regard, however, that the substance of the first action is essentially reproduced in this proceeding. Accordingly, the Defendant argues that the doctrine of res judicata applies and that it ought not to be put in a position of relitigating the same case. The Defendant further argues that in any event, the claim is bereft of any possibility of success in that much of the relief sought by the Plaintiff in this current action is within the exclusive jurisdiction of the Tax Court of Canada. To the extent the claim is in respect of an income tax assessment for which the appeal period has passed, the Defendant is correct. In addition, the relief sought in the current action, an order of mandamus for payment of a tax refund, is relief that can only be sought by way of an application for judicial review. Accordingly, this motion must be granted and the action dismissed.
[12] Mr. Wilson did not accept the dismissal of the 2005 action and seeks to appeal Prothonotary Milczynski’s decision. However, as with many of Mr. Wilson’s previous judicial ventures, he did not file an appeal before the expiry of the filing deadline fixed by Rule 51(2). In the result, he has brought this motion for an extension of time under Rule 8. Needless to say, the Defendants not only oppose Mr. Wilson’s claim to relief but seek an Order under section 40 of the Federal Courts Act, above, barring Mr. Wilson from further prosecuting his claim to relief and from initiating further actions against them without first obtaining leave to do so. The Defendants assert that Mr. Wilson is a vexatious litigant and that this action is a vexatious proceeding.
Analysis
Should the Court Extend Time to Mr. Wilson to Bring an Appeal from Prothonotary Milczynski’s Order to Dismiss the 2005 Action?
[13] While the authority of this Court to extend time to allow a party to initiate a proceeding out-of-time involves an exercise of discretion, it is still subject to the application, where appropriate, of several identified considerations.
[14] In Jakutavicius v. Canada (Attorney General), [2004] F.C.J. No. 1488, 2004 FCA 289, the Federal Court of Appeal confirmed the 5 usual factors to be taken into account on a motion such as this one. Those factors are:
1. Did the applicant have a continuing intention to proceed within the period allowed by the Rule and thereafter?
2. What is the length of the delay?
3. To what extent, if any, will the opposite party be prejudiced by the granting of an extension of time?
4. Does the applicant have an explanation for delay?
5. Is there an arguable case for quashing the order the applicant seeks to challenge?
[15] On this motion, the Defendants concede that the length of delay was short and, in fact, it is only a matter of a few days. The Defendants also do not argue that Mr. Wilson had no continuing intention to appeal nor do they assert that any serious prejudice would result from an extension. They do, however, argue that Mr. Wilson has not provided evidence to explain his delay in bringing an appeal within the 10 days allowed and, of course, they strongly assert that there is no arguable case for an appeal from Prothonotary Milczynski’s Order. On the latter issue, they say that allowing Mr. Wilson to proceed with an appeal would be to give further life to what is already very clearly a vexatious history of litigation.
[16] Having regard to the conclusion I have reached on the issue of the merits of Mr. Wilson’s proposed appeal, it is unnecessary for me to consider whether he has produced evidence which adequately explains the filing delay.
[17] Because Prothonotary Milczynski’s decision in this case was a final determination of the proceeding, I accept that a reviewing Judge would be expected to consider the matter de novo. In other words, an independent evaluation of the evidence and its application to the law would be required on an appeal from that decision. Nevertheless, I can see nothing in Prothonotary Milczynski’s decision which constitutes an arguable error. I also cannot identify an evidentiary or legal basis for a reviewing Judge coming to a different conclusion.
[18] It is quite obvious that the pleadings in the 2005 action are substantially duplicative of the allegations and claims to relief set out in the Statement of Claim issued in the 1999 action. The law is very clear that a plaintiff is not entitled to relitigate a matter which was previously dismissed because of serious procedural failings or misconduct before the Court.
[19] It was contended by Mr. Wilson that he has never had the benefit of a decision on the merits of his legal complaint. He says that the principle res judicata only applies where such a substantive judicial determination has been previously rendered. Mr. Wilson is correct that there is judicial authority which limits the application of the principle of res judicata to a situation where there has been a prior merit-based adjudication. It is, however, well understood that abuse of process is a complimentary or adjunctive doctrine to res judicata which also prevents relitigation in appropriate circumstances to preserve the integrity of the Court’s process: see Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, [2003] S.C.C. No. 64, 2003 SCC 63 at para. 38.
[20] The question here is whether Mr. Wilson’s repeated and flagrant disregard for the Court’s rules and procedures, leading to the dismissal of the 1999 action, should simply be ignored in the face of the present action. It is inconceivable to me that the Court could ever reasonably countenance such an outcome because to do so would encourage disrespect for due process and seriously prejudice the interests and reasonable expectations of the opposite party.
[21] This is a situation where the doctrine of abuse of process by relitigation clearly applies. Indeed, the facts of this case are virtually identical to the those described in the decision of Justice François Lemieux in Sauve v. Canada, [2002] F.C.J. No. 1001, 2002 FCT 721. That case involved an attempt by the plaintiff to relitigate a matter which had been previously dismissed because of the plaintiff’s non-compliance with this Court’s procedural directions and for delay. The cause of action and the material facts pleaded by the plaintiff in the second action were described as virtually identical to those pleaded in the first action. In dismissing the second action as an abuse of this Court’s process, Justice Lemieux described the operative legal principles in the following passage at paras. 16 to 22:
16 In Lifeview Emergency Services, supra, the plaintiff's claim was struck against one of the defendants based on a provision in the Alberta Rules which required material steps to be undertaken in an action. In other words, there was a dismissal for want of prosecution. The plaintiff later discontinued its action against other defendants but commenced an action in the Federal Court essentially raising the same issues as before the Alberta Court.
17 Justice Rothstein wrote at paragraph 13 of the reported case:
[13] As to whether it is an abuse of the process to discontinue in one court and commence action in another having concurrent jurisdiction, I do not think that there is any general rule of law to this effect. Of course, in particular cases, discontinuing and commencing afresh may be found to be abusive whether it be in the same or a different court. But such a finding would be based on the facts of the case. Further, it may be that in the case of particular statutory schemes or particular schemes of the rules of court, a second action in a court of concurrent jurisdiction will be precluded if a party has first elected to proceed in one court. [emphasis added in Sauve]
18 In Babavic v. Babowech, [1993] B.C.J. No. 1802, Justice Baker stated the principle of abuse of process is somewhat amorphous and the discretion afforded courts to dismiss actions on the ground of abuse of process extends to any circumstance in which the court process is used for an improper purpose. Justice Baker added the categories of abuse of process are open.
19 As I see it, the case law has established the following parameters surrounding the doctrine of abuse of process:
(1) it is a flexible doctrine, not limited to any set number of categories;
(2) its purpose is a public policy purpose used to bar proceedings that are inconsistent with that purpose;
(3) its application depends on the circumstances and is fact and context driven;
(4) its aim is to protect litigants from abusive, vexatious or frivolous proceedings or otherwise prevent a miscarriage of justice;
(5) a particular scheme of the rules of court may provide a special setting for its application.
20 Applying those principles in the particular circumstances of the case before me, I agree with counsel for the respondent that, notwithstanding the plaintiff's claim has not been adjudicated on the merits, his refiling of his statement of claim after its dismissal under the case management rules constitutes an abuse of process. In my view, he had every reasonable opportunity to advance his case to an adjudication on its merits, was given an opportunity to do so by order of Justice Dubé of this Court, but violated that order and so the dismissal of his first action.
21 In upholding the dismissal of the plaintiff's first action, Justice Sharlow focussed on the fact he had unjustifiably failed to comply with Justice Dubé's case management order. That order, it will be recalled, gave the plaintiff an opportunity to pursue his action by filing a reply and proceeding in accordance with the Rules.
22 I agree with counsel for the respondent, in the circumstances of this particular case, to allow the plaintiff to proceed with a second action which is simply a mirror of his first action would make a mockery of the Case Management Rules.
[22] I am satisfied that substantially all of Mr. Wilson’s 2005 Statement of Claim is an attempt to relitigate matters which were finally determined upon the dismissal of his 1999 action or, as Prothonotary Milczynski correctly put it, “the substance of the first action is essentially reproduced in this proceeding”. To the extent that those actions overlap, the 2005 pleadings obviously constitute an abuse of the Court’s process by relitigation and, therefore, could not be allowed to stand on any plausible basis. In the result, I have concluded that Mr. Wilson’s proposed appeal from Prothonotary Milczynski’s decision, insofar as the two claims overlap, has no legal merit and absolutely no prospect for success.
[23] In his argument before me, Mr. Wilson did not disagree that there was considerable overlap between the principal claims advanced in the 1999 and 2005 actions. However, he points to additional allegations in the 2005 Statement of Claim which were not contained within his 1999 pleadings. The current Statement of Claim does refer to a 2005 Notice of Tax Assessment and it seeks to have that process set aside. However, in argument before me, Mr. Wilson did not contest the correctness of Prothonotary Milczynski’s ruling that this is a claim which falls within the exclusive jurisdiction of the Tax Court. Mr. Wilson attributed this particular pleading to a lack of personal knowledge about the jurisdictional divisions between the Federal Court and the Tax Court. There is, therefore, no arguable error in Prothonotary Milczynski’s decision to strike out that portion of the 2005 Statement of Claim.
[24] The only remaining matters pleaded in the 2005 Statement of Claim which were not included in the 1999 pleadings are vague allegations of misrepresentations attributed to the Defendants. Those allegations are as follows:
4. On January 17, 1989, beyond the Statue of Limitation period, the Defendants further and continued to misrepresent to the Federal Court of Appeal (Case #A5-78-96) on March 16, 2001, that the two arguments: (1) garnishment of Chrysler in the amount of $85,372.46 was not represented, and (2) the statue of limitation was not represented; which is not true and were both represented at the Trial and Appeal Briefings.
5. In January 2003, the Defendant’s counsel misrepresented to this Court that mediation settlements in the amount of $100,000.00 were not agreed upon which led to the withdrawal of the Plaintiff’s legal counsel scheduled attendance for the January 16 and 17, 2003 discoveries.
6. In September 29, 2005, the Defendant’s counsel misrepresented to this Court before Madame Justice Mactavish, on the submission of the Plaintiff’s Addendum to Motion Record that she did not receive or have any knowledge of the filing.
The 2005 Statement of Claim does not seek any specific relief related to these alleged misrepresentations and no obvious legal cause of action is raised by the above paragraphs.
[25] In my view, even if the above allegations were sufficient to found an independent cause of action (a doubtful proposition at best), they would also be subject to the application of cause of action estoppel or abuse of process, or both. If Mr. Wilson had justiciable grievances which arose in the course of that initial action in this Court, he had an obligation to raise those matters in that forum. In that regard, it is noteworthy that Mr. Wilson’s final motion for reconsideration of the dismissal of his 1999 action was only dismissed out of this Court by an Order dated September 29, 2005 and his present complaints all pre-date that determination. Allegations of misrepresentations made by the Defendants in the context in that earlier proceeding should properly have been raised by Mr. Wilson within that proceeding and, in particular, within the motions for reconsideration. Indeed, the last of Mr. Wilson’s allegations of misrepresentation refers to the Defendants’ conduct before Justice Mactavish on the second of the reconsideration motions. If Mr. Wilson believed that the Defendants, or their counsel, had made material misrepresentations to the Court in 2005, that was the time and place to raise it and not through a collateral proceeding such as this one. In that regard I would adopt the remarks of Justice L’Heureux-Dubé in Roberge v. Bolduc (1991), 78 D.L.R. (4th) 666 (S.C.C.) at 686 where she stated: “It is the responsibility of the party concerned to make use of these nullities at the proper time, using one of the remedies provided by law: allowing the matter to be reopened in such circumstances would be to undermine the very foundation of the whole theory on which the presumption of res judicata is based.”
[26] Mr. Wilson also argued that Prothonotary Milczynski acted without jurisdiction by dismissing the 2005 action because Rule 50 of the Federal Courts Rules does not extend summary judgment jurisdiction to a Prothonotary for claims exceeding $50,000.00. In response to the point that the Prothonotary made her Order under Rule 221 (Motion to Strike) and not Rule 50, Mr. Wilson points out that he had sought summary judgment in the 2005 Statement of Claim. In the face of that pleading, Mr. Wilson says that the Prothonotary should not have entertained any motion by the Respondents to dismiss his action whatever the Rule relied upon. This argument is obviously without merit because the Prothonotary’s Order was not made under Rule 50 and no jurisdictional issue, therefore, arises.
[27] Having regard to all of the above, I have concluded that Mr. Wilson has failed to establish that he has an arguable case to set aside the Order of Prothonotary Milczynski dismissing this action and his motion to extend time to bring an appeal is dismissed.
Should the Court Grant an Order Under Section 40(1) of the Federal Courts Act Barring Mr. Wilson from Bringing Further Proceedings in this Court?
[28] The Crown has moved under section 40(1) of the Federal Courts Act, above, to bar Mr. Wilson from commencing any further proceedings in this Court except with leave. I accept that this form of relief is extraordinary and must only be exercised with the greatest of care. The gravity of such a request is reflected, in part, by the requirement that the Attorney General of Canada give prior consent before a section 40 Order can be issued. In this case, the required consent has been filed with the Court.
[29] For a section 40 Order to be issued I must be satisfied that Mr. Wilson has persistently brought vexatious proceedings in this Court or has conducted this matter and its related proceedings in a vexatious manner. I have concluded that this is an appropriate case for making such an Order because Mr. Wilson’s litigation conduct has been persistently vexatious and repeatedly found to be an abuse of the Court process.
[30] The authorities have interpreted “vexatious” as being broadly synonymous with the concept of abuse of process: see Foy v. Foy (1979), 102 D.L.R. (3d) 342 (Ont. C.A.). It is, therefore, not surprising that one of the notable characteristics of a vexatious litigant is the propensity to relitigate matters that have already been determined against him: see Vojic v. Canada (Minister of National Revenue), [1992] F.C.J. No. 902 (T.D.).
[31] Other indicia of vexatious behaviour include the initiation of frivolous actions or motions, the making of unsubstantiated allegations of impropriety against the opposite party, legal counsel or the Court, the refusal or failure to abide by rules or orders of the Court, the use of scandalous language in pleadings or before the Court, the failure or refusal to pay costs in earlier proceedings and the failure to pursue the litigation on a timely basis: see Vojic, above; Canada v. Warriner (1993), 70 F.T.R. 8, [1993] F.C.J. No. 1007; Canada v. Olympia Interiors Ltd., [2001] F.C.J. No. 1224, 2001 FCT 859; Mascan Corp. v. French (1988), 49 D.L.R. (4th) 434, 64 O.R. (2d) 1 (C.A.); Foy, above; Canada Post Corp. v. Varma (2000), 192 F.T.R. 278, [2000] F.C.J. No. 851; and Nelson v. Canada (Minister of Customs and Revenue Agency), [2002] F.C.J. No. 97, 2002 FCT 77.
[32] In varying degrees, Mr. Wilson’s conduct in this Court has fulfilled every one of the above-noted characteristics of vexatiousness. He is also extremely litigious and I have no doubt that, absent an Order barring further actions against the Crown in this Court, he will continue to advance his unmeritorious cause in this Court. In the result, Mr. Wilson will be barred from bringing any further proceedings in this Court except with leave of the Court. The Crown will have its costs on both motions in the total amount of $1,000.00 payable forthwith.
ORDER
THIS COURT ORDERS that the Plaintiff’s motion for an extension of time to bring an appeal from the Order of Prothonotary Milczynski is dismissed.
THIS COURT FURTHER ORDERS that the Plaintiff is barred from bringing any further proceedings in this Court except with leave of the Court.
THIS COURT FURTHER ORDERS that the Plaintiff shall pay to the Defendants costs in the amount of $1,000.00 payable forthwith.
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2149-05
STYLE OF CAUSE: GRANT R. WILSON
-and-
REVENUE CANADA AND HER MAJESTY THE QUEEN
PLACE OF HEARING: LONDON, ONTARIO
DATE OF HEARING: TUESDAY, NOVEMBER 21, 2006
APPEARANCES:
Grant R. Wilson
FOR PLAINTIFF
Maria Vujnovic FOR DEFENDANTS
SOLICITORS OF RECORD:
562 Waterloo Street,
London, Ontario, N6B 2P9 FOR PLAINTIFF
John H. Sims, Q.C.
Deputy Attorney General of Canada FOR DEFENDANTS