Court File and Parties

COURT FILE NO.: CV-23-91583 DATE: 2023/06/13

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

Canada Mortgage and Housing Corporation Applicant – and – Melissa Hart Respondent

Counsel: Ian Houle, Self-represented Respondent not appearing

HEARD: June 8, 2023, additional written submissions received June 8, 2023

Reasons for Decision

RYAN BELL J.

Overview

[1] Canada Mortgage and Housing Corporation applies for a declaration that Melissa Hart is a vexatious litigant and an order that no further proceedings be instituted or continued by Ms. Hart, except with leave of a judge of the Superior Court of Justice.

[2] A bank obtained default judgment obtained against Ms. Hart in September 2010. The judgment was later assigned to CMHC. Commencing in November 2017 and continuing, Ms. Hart has brought actions and motions against the bank and CMHC in an effort to set aside the default judgment. Ms. Hart appealed the dismissal of one of her motions to the Court of Appeal for Ontario. Her appeal was dismissed. She has been found in contempt of court and in breach of three court orders for failing to attend on an examination in aid of execution. Various costs awards against Ms. Hart remain outstanding. A further appeal to the Court of Appeal is in the offing. In 2020, Ms. Hart was found to be a vexatious litigant in the context of family law proceedings.

[3] Ms. Hart did not attend the hearing of this application, although she was served with the application materials and the confirmation of application form, and she was provided with the ZOOM coordinates for the hearing. I am satisfied that Ms. Hart was aware that the application would proceed, as scheduled, on June 8. Ms. Hart did not file any evidence responding to the application.

[4] For the following reasons, I declare that Ms. Hart is a vexatious litigant and I order that no further proceedings may be instituted or continued by her in any court, except with leave of a judge of this court.

(i) The 2010 default judgment

[5] In July 2010, First National Financial GP Corporation commenced an action against Ms. Hart as a result of payment defaults on a mortgage granted in favour of the bank.

[6] On September 30, 2010, the bank obtained default judgment against Ms. Hart in the amount of $327,964.66, inclusive of pre-judgment interest, with costs to be assessed on a substantial indemnity basis. As reflected in the judgment, Ms. Hart was served with the statement of claim.

[7] In February 2011, the bank transferred its interest in the judgment to CMHC.

(ii) Ms. Hart’s 2017 action

[8] On November 16, 2017, Ms. Hart commenced an action in this court – CV-17-586669 – against the bank. Ms. Hart claimed general damages of $1 million and punitive damages of $2 million against the bank arising out of the enforcement of the mortgage.

[9] On April 10, 2018, Glustein J. dismissed Ms. Hart’s 2017 action pursuant to r. 2.1.01 of the Rules of Civil Procedure. Justice Glustein concluded that on the face of the claim, there was no cause of action and that the action was therefore frivolous, vexatious, and an abuse of process: Hart v. First National Financial GP Corporation, 2018 ONSC 2336.

(iii) Ms. Hart’s 2018 action

[10] On May 31, 2018, less than two months after the dismissal of Ms. Hart’s 2017 action, Ms. Hart commenced a second action in this court – CV-18-59885 – against the bank. Ms. Hart’s 2018 action was based on the same facts and causes of action as pleaded in her 2017 action.

[11] Justice Glustein dismissed Ms. Hart’s 2018 action under r. 2.1.01. In determining the 2018 action to be frivolous, vexatious, and an abuse of process, Glustein J. relied on his April 10, 2018 reasons dismissing her 2017 action. Justice Glustein found that, not only were the plaintiffs seeking to relitigate a decision to enforce the mortgage (the default judgment), but they were also attempting to relitigate his April 10, 2018 decision: Hart v. First National Financial GP Corporation, 2018 ONSC 5405.

(iv) Ms. Hart’s motion to set aside the default judgment

[12] On October 29, 2019, Ms. Hart delivered a notice of motion in the default judgment proceeding for a motion to proceed in writing to set aside the default judgment based on an alleged “misrepresentation of facts.”

[13] The motion did not proceed in writing. It was heard by Skarica J. on November 25, 2020. Justice Skarica dismissed the motion, with costs in the amount of $22,325.63 to be paid forthwith. Justice Skarica wrote in his endorsement that, “[i]n my opinion, this is the third time that the defendants have engaged “in the pursuit of fruitless litigation. In order to discourage further harassment of the plaintiffs by frivolous and vexatious litigation, costs are awarded on a substantial indemnity rate.” To date, the costs ordered by Skarica J. remain unpaid.

(v) Ms. Hart’s appeal to the Court of Appeal

[14] Ms. Hart appealed Skarica J.’s order to the Court of Appeal.

[15] On January 24, 2022, the Court of Appeal dismissed the appeal with costs to CMHC in the amount of $5,000: Canada Mortgage and Housing Corporation v. Hart, 2022 ONCA 51. On the appeal, Ms. Hart admitted that she was served with the statement of claim in the 2010 action. The Court of Appeal agreed with Skarica J. that Ms. Hart failed to move with any diligence to set aside the 2010 default judgement and she failed to identify any factual basis on which the judgment could be set aside based on fraud or subsequently discovered facts.

[16] The costs of $5,000 have not been paid by Ms. Hart.

(vi) Ms. Hart’s second motion to set aside the default judgment

[17] One week after the Court of Appeal’s dismissal of her appeal, Ms. Hart again moved to set aside the default judgment. On June 30, 2022, McGraw A.J. stayed Ms. Hart’s second motion pending submissions under r. 2.1.01. Associate Justice McGraw was satisfied that “on its face, there are legitimate concerns that the Motion is frivolous or vexatious and/or an abuse of the court’s process.”

[18] Associate Justice McGraw’s order included a term that “the Registrar shall not accept any further filings with the exception of the Defendant’s written submissions if delivered in accordance with Rule 2.1.01(3)(2).”

[19] On May 10, 2023, McGraw A.J. dismissed the motion under r. 2.1.01 stating, “I am satisfied that the Motion is a clear case of a proceeding which is frivolous, vexatious and an abuse of the court’s process”: Canada Mortgage and Housing Corporation v. Hart, 2023 ONSC 2786, at para. 30.

(vii) CMHC’s motion to compel attendance at an examination in aid of execution

[20] On April 14, 2022, Ms. Hart failed to attend on her examination in aid of execution. CMHC then moved to compel her attendance. On June 22, 2022, Krawchenko J. ordered Ms. Hart to attend at an examination on July 19, 2022.

[21] Costs were awarded in favour of CMHC in the amount of $3,000. To date, Ms. Hart has failed to pay these costs.

(viii) Ms. Hart’s third motion to set aside the default judgment

[22] On June 30, 2022, Ms. Hart moved, yet again, to “suspend/set aside” the 2010 default judgment pending the outcome of her second motion to set the judgment aside. On July 29, 2022, the court confirmed that her third motion was stayed as a result of McGraw A.J.’s endorsement dated June 30, 2022.

(ix) CMHC’s motion to find Ms. Hart in contempt and the breaches of court orders

[23] Ms. Hart failed to attend the examination in aid of execution on July 19, 2022 as ordered by Krawchenko J. CMHC brought a motion for contempt.

[24] On November 17, 2022, MacNeil J. found Ms. Hart to be in contempt of court. She was provided with an opportunity to purge her contempt by attending the examination. When Ms. Hart failed to do so, the parties reattended before MacNeil J. on January 10, 2023. Ms. Hart was found to be in breach of two court orders, but was granted a second opportunity to purge her contempt.

[25] Again, Ms. Hart failed to attend her examination in aid of execution.

[26] For a third time, the parties attended before MacNeil J. Ms. Hart was now in breach of three court orders, but was granted a third opportunity to purge her contempt. Ms. Hart did not, however, attend her examination on April 18, 2023 as ordered, nor did she produce the financial documentation as ordered by MacNeil J.

(x) Ms. Hart’s motion to set aside the order of Krawchenko J. and two of the orders made by MacNeil J.

[27] Ms. Hart moved to set aside the order of Krawchenko J. requiring her to attend her examination in aid of execution and the first two orders made by MacNeil J. On February 2, 2023, Sheard J. dismissed the motion, with costs, noting that Ms. Hart should not have brought her motion in the face of McGraw A.J.’s endorsement of June 30, 2022. The costs of $1,500 have not been paid by Ms. Hart.

(xi) Ms. Hart’s motion to set aside the order of Krawchenko J.

[28] On May 16, 2023, Ms. Hart moved, once again, to set aside the order of Krawchenko J. Justice Sheard dismissed the motion stating in part:

[9] The defendants did not produce the financial documentation, nor did they attend to be examined as ordered by MacNeil J. on March 17, 2023. Instead, they brought this motion. The Registrar again appeared to have accepted Ms. Hart’s motion in error; she ought not to have been permitted to bring this motion, pending the outcome of the r. 2.1.01 motion.

[10] In filing this motion, I conclude that Ms. Hart deliberately breached the orders made by A.J. McGraw and by me. I further conclude that this motion had no merit whatsoever and was, itself, frivolous and vexatious and was itself an abuse of the court’s process.

[11] On May 10, 2023, A.J. McGraw released his decision on the 2.1.01 motion and dismissed Ms. Hart’s motion to set aside the plaintiff’s default judgment. At para. 31 of his Endorsement, A.J. McGraw stated that “the Motion is a clear case of a proceeding which is frivolous, vexatious and an abuse of the court’s process.

[12] As noted, Melissa Hart was not entitled to come to this court pending the release of A.J. McGraw’s decision on the r. 2.1.01 motion. Further, this motion was devoid of merit and an abuse of process.

[29] The costs of $2,260 awarded in favour of CMHC have not been paid by Ms. Hart.

(xii) Ms. Hart’s appeal of McGraw A.J.’s dismissal under r. 2.1.01

[30] On May 29, 2023, Ms. Hart served CMHC with a notice of appeal from the decision of McGraw A.J., requesting that her second motion to set aside the default judgment “be restored to the list” of the Superior Court of Justice.

Ms. Hart found to be a vexatious litigant in Hart v. Fullarton

[31] In Hart v. Fullarton, 2020 ONSC 6804, in the context of a family law proceeding, Nakonechny J. made an order under s. 140(1) of the Courts of Justice Act preventing Ms. Hart from instituting any further proceeding against the respondent in that case without leave of the court. In concluding that it was appropriate to make such an order, Nakonechny J. relied on the “numerous proceedings in this and other courts which have been found by other judges to be frivolous, vexatious and without merit”: Hart v. Fullarton, at para. 82.

Legal principles: vexatious litigant applications

[32] Where a judge of the Superior Court of Justice is satisfied that a person has “persistently and without reasonable grounds” instituted vexatious proceedings in any court, or conducted a proceeding in any court in a vexatious manner, the judge may order that no further proceeding be instituted by the person in any court or a proceeding previously commenced not be continued, except by leave of the judge: Courts of Justice Act, s. 140(1).

[33] While a person’s access to justice is a fundamental right, the court must be diligent to ensure that its processes are not abused by any particular litigant to the detriment of, not only those directly involved in the litigation, but also the system at large: P.R. v. K.R., at para. 1. The control of vexatious proceedings is necessary to protect the integrity of the judicial system: Dale Streiman & Kurz LLP v. De Teresi, at para. 7.

[34] In Lang Michener Lash Johnston v. Fabian, Henry J. summarized the characteristics of vexatious proceedings:

(a) the bringing of one or more actions to determine an issue which has already been determined by a court of competent jurisdiction constitutes a vexatious proceeding; (b) where it is obvious that an action cannot succeed, or if the action would lead to no possible good, or if no reasonable person can reasonably expect to obtain relief, the action is vexatious; (c) vexatious actions include those brought for an improper purpose, including the harassment and oppression of other parties by multifarious proceedings brought for purposes other than the assertion of legitimate rights; (d) it is a general characteristic of vexatious proceedings that grounds and issues raised tend to be rolled forward into subsequent actions and repeated and supplemented, often with actions brought against the lawyers who have acted for or against the litigant in earlier proceedings; (e) in determining whether proceedings are vexatious, the court must look at the whole history of the matter and not just whether there was originally a good cause of action; (f) the failure of the person instituting the proceedings to pay the costs of unsuccessful proceedings is one factor to be considered in determining whether proceedings are vexatious; and (g) the respondent’s conduct in persistently taking unsuccessful appeals from judicial decisions can be considered vexatious conduct of legal proceedings.

Application of the legal principles to the facts

[35] On the record before me, I have no hesitation in finding that Ms. Hart is a vexatious litigant.

[36] Ms. Hart’s actions to set aside the default judgment were summarily dismissed under r. 2.1.01 as being, on their face, frivolous, vexatious, and an abuse of process. Her repeated motions to set aside the default judgment have been dismissed, as was an appeal to the Court of Appeal. Each of these proceedings bears the hallmark of vexatious proceedings in that the grounds and issues raised by Ms. Hart are “rolled forward” and repeated in the next proceeding.

[37] Ms. Hart has been found to be in contempt of court and she is in breach of three court orders requiring her to attend on her examination in aid of execution. She has been found to have deliberately breached two court orders. Numerous costs awards have been made against her, none of which has been paid. Her conduct is abusive of the court’s process and is oppressive to CMHC.

[38] Ms. Hart persists in taking unsuccessful appeals from judicial decisions. Most recently, she served a notice of appeal from the decision of McGraw A.J.

[39] In other proceedings, Ms. Hart has previously been found to be a vexatious litigant.

[40] I have considered the whole history of the default judgment proceeding and the subsequent proceedings initiated by Ms. Hart. Her vexatious conduct is repeated and persistent. Ms. Hart is abusing the court’s process to the detriment of not only CMHC but also the system at large.

Conclusion

[41] I therefore declare Ms. Hart to be a vexatious litigant pursuant to s. 140(1) of the Courts of Justice Act. I order that no further proceedings, including motions, be commenced or continued by Ms. Hart in any court, except with leave of a judge of the Superior Court of Justice. To be clear, this order prevents Ms. Hart from continuing the motions and any appeal arising from court file no. 10-21322, including the appeal of the order of McGraw A.J. The word “proceeding” in s. 140(1) of the Courts of Justice Act extends to appeals to the Court of Appeal: Kallaba v. Bylykbashi, [2006] O.J. No. 545, at para. 26, citing Varma v. Rozenberg, [1998] O.J. No. 4183.

[42] CMHC requests its costs of the application on a full indemnity basis. CMHC’s costs, with fees calculated on a full indemnity basis are $10,513.29. CMHC’s costs, with fees calculated on a substantial indemnity basis are $10,264.56. Substantial indemnity costs is the elevated scale of costs normally reserved to cases where the court wishes to express its disapproval of the conduct of a party to the litigation; conduct worthy of sanction would have to be “especially egregious” to justify full indemnity costs: Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766, at para. 9.

[43] I am satisfied that full indemnity costs are appropriate in this case. This is not the first time Ms. Hart has been found to be a vexatious litigant. She has initiated a barrage of vexatious, frivolous, and abusive proceedings against CMHC. She is in contempt of court and, despite being given repeated opportunities to do so, has failed to purge her contempt. She has deliberately breached court orders. In November 2020, Skarica J. ordered costs on a substantial indemnity basis in order to discourage further harassment of CMHC. That costs award, and others, apparently had no effect on Ms. Hart.

[44] Ms. Hart’s conduct is especially egregious and warrants an award of full indemnity costs. In the circumstances, I find the costs claimed by CMHC to be reasonable. I therefore fix costs in the all inclusive amount of $10,513.29. This amount is to be paid by Ms. Hart to CMHC within 60 days.

Madam Justice Robyn M. Ryan Bell

Released: June 13, 2023