Costs Implications for Rule 2.1 Proceedings
July 6, 2015
Access to justice is a hot-button issue that has received numerous headlines as well as extensive comments from the bench. It is a pillar of any just judicial system. With that said however, this basic right is often abused, as parties routinely commence frivolous, vexatious and abusive proceedings. These proceedings slow the whole legal system to a crawl and force innocent parties to expend enormous sums of money trying to deal with baseless claims. The cost, time and waste is compounded further when dealing with vexatious[1] litigants who use every opportunity to abuse the processes of the Court.
In order to combat the worst of these proceedings, last summer Rule 2.1 was enacted. Rule 2.1 allows the Court on its own initiative to stay or dismiss a proceeding which appears on its face to be frivolous, vexatious or otherwise an abuse of process. Practically speaking, Rule 2.1 allows a party to write to the Regional Senior Justice requesting a review of a particular proceeding on the basis it offends the Rules and/or the law to such a degree that there is no chance of success and accordingly ought to be struck. If the Court finds this to be the case, the offending party has the ability to make submissions in writing as to why the proceeding should not be stayed or dismissed. The Court will then render a decision. This streamlined process is far quicker and more cost effective than the traditional route of bringing a motion pursuant to Rule 21.01(b). By proceeding summarily and in writing, Rule 2.1 avoids the pitfall inherent to a Rule 21.01(b) motion which provides a vexatious litigant further opportunity to abuse the processes of the Court.
While this is an enormous amount of power for the Court to wield, it is only meant to be invoked in the clearest of cases.
By way of example, we assisted a client with one such case in Kaptain Nino King James El-Bey a.k.a. Jamie Howe v. Magnum Opus (Brampton) et al. In this matter, our client, the Defendant, was the builder/owner of a housing sub-division. The Plaintiff was an adherent of Moorish Law, members of which have been found by the Courts to be “Organized Pseudolegal Commercial Argument Litigants” (“OPCA”) [2]. OPCA litigants have previously been found to abuse the Court procedures and have been found to be vexatious litigants in Courts across Canada.
The Plaintiff viewed one house in our client’s sub-division on the open market but never made an offer to purchase the home. Nonetheless, utilizing principles of Moorish Law, the Plaintiff attempted to assert ownership of the house pursuant to an alleged “verbal contract”. He attended at the property numerous times, posted various Moorish Law “ownership permits” to the front door of the home, attempted to slander title by attending the Land Registry Office asking them to transfer title to his name, attended unannounced at our offices and engaged in other vexatious conduct. The Plaintiff also issued a Statement of Claim seeking “ownership” of the property pursuant to a “verbal contract” and various Moorish Law principles, which have no force in Canada.
Upon review, the Statement of Claim failed to disclose a reasonable cause of action, and relied on principles unknown to Ontario law. As a result, our firm wrote to the Regional Senior Justice and requested the Court institute a Rule 2.1 review. Ultimately, the Plaintiff’s Action was dismissed pursuant to Rule 2.1.
What is most notable, is that our client was awarded Full Indemnity Costs against the Plaintiff for all costs incurred incidental to the Action as contemplated in s.131(1) of the Courts of Justice Act. Thanks to the R.2.1 process, only minimal costs incurred were directly attributable to the litigation procedures. However, significant costs were incurred resulting from the Plaintiff’s overall conduct surrounding the litigation as noted above. To our knowledge this is the first such instance in which the Court has awarded costs of this nature in a R. 2.1 proceeding. In Justice Daley’s unreported decision, his Honour held:
The Plaintiff instituted an action devoid of any merit, clearly for the sole purpose of disrupting the business of the Defendants. The conduct of the plaintiff was egregious and caused the moving defendant to incur significant legal costs and disbursements. The plaintiff intentionally and without any right to do so, interfered with the good title and ownership of the property in question. The Plaintiff and persons like him . . . must be deterred in instituting meritless actions and an award of full indemnity costs is one means of doing so.
As a result of Rule 2.1 this Action was fully disposed of in only 3 months, giving closure to our client far more quickly and less expensively, than otherwise would have been possible.
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[1] I use the word “vexatious” liberally, to include those whose conduct is abusive and not just those who have been formally found by the Court to be “Vexatious Litigants” pursuant to s.140 of the Courts of Justice Act.
[2] For an understanding of “Moorish Law” and OPCA litigants, please see the decision of the Court of Queen’s Bench of Alberta in Meads v. Meads 2012 ABQB 571;http://www.canlii.org/en/ab/abqb/doc/2012/2012abqb571/2012abqb571.html
