Court File and Parties
COURT FILE NO.: CV-24-00000056-0000 DATE: 2024-07-30 SUPERIOR COURT OF JUSTICE – ONTARIO 10 Louisa Street, Orangeville ON L9W 3P9
RE: Kevin Drizen, Plaintiff AND: Capital One Bank (Canada Branch), Defendant
BEFORE: Justice M. Kurz
COUNSEL: Kevin Drizen, Self-represented Plaintiff Todd Christensen, for the Defendant
HEARD: July 29, 2024, in person
Endorsement
Introduction
[1] The Defendant, Capital One Bank (“Capital”) moves under Rule 21.01(3)(c) and (d) of the Rules of Civil Procedure to dismiss this action as an abuse of process. Capital also moves for an order that the Plaintiff, Kevin Drizen, be declared a vexatious litigant. However, as Capital’s motion was brought on an ordinary motion date and argument of the two heads of relief would take well over an hour, it was agreed that I would only hear the motion to strike.
[2] It was also agreed that the motion to declare Mr. Drizen a vexatious litigant would be adjourned sine die. It turns out that there is another outstanding motion for the same relief brought by lawyers at Lenczner Slaght. It would make sense to adjourn that aspect of this motion to be heard together with or immediately following the other motion. Mr. Drizen offered no objection to that proposal.
[3] After contacting them at the lunch break, Mr. Christensen indicated that counsel at Lenczner Slaght would be agreeable to having both vexatious litigant motions heard together. While I encourage that result in the interests of judicial economy and the avoidance of inconsistent results, I believe that both a written consent in the other proceeding and confirmation from this court that the time is available would be necessary before making such an order. I suggest that a basket motion be brought if so instructed. Meanwhile, I adjourn that portion of the motion sine die.
[4] With regard to the motion to strike, for the reasons that follow, I find that this action is an abuse of process. The issues raised in this action are res judicata since they are raised or could have been raised in a Small Claims Court action between the parties and the attendant appeal before LeMay J. In that failed appeal by Mr. Drizen, LeMay found that there was no merit to the appeal of a Small Claims Court judgment against Mr. Drizen.
Background
[5] This action is an outgrowth of a Small Claims Court action for non-payment of a relatively small Capital credit card balance.
[6] In January 2021 Capital caused a Claim to be issued in the Small Claims Court for $2,980.32 plus interest at 19.8% per annum.
[7] When Capital found itself unable to serve the claim, it moved before Kidd D.J. to extend the time for service and to permit service by mail. Kidd D.J. granted the relief on November 4, 2021. Following service, Mr. Drizen served and filed his Defence. His defence was essentially a limitations and procedural one. He claimed that the claim was not brought within the applicable limitation period under the Limitation Act, 2002, S.O. 2002, c. 24, Sch. B and that the time for service of his claim should not have been extended by Kidd D.J. He did not dispute the debt, or the interest rate claimed by Capital.
[8] As a result, Capital moved to strike the Defence as raising no reasonable cause of defence as set out in r. 12.02(1)(a) of the Rules of the Small Claims Court. At the motion, Mr. Drizen argued that Capital had improperly acted to obtain the ex parte order extending the time for service of the Claim. He added that Capital had engaged in “machinations” to make it look difficult to serve him and referred to aliases of his name to make him look like a criminal. McLean D.J. rejected these arguments and granted judgment for Capital.
[9] Mr. Drizen appealed the order of McLean D.J. to the Divisional Court. The appeal was heard by LeMay J., sitting as a single judge of the court. On June 12, 2024 LeMay J. dismissed the appeal, with reasons to follow. On June 24, 2024, Lemay J. issued his endorsement. He found that “this appeal has no merit”. He awarded Capital costs of $10,000. Mr. Drizen has now moved for leave to appeal that decision to the Court of Appeal for Ontario. No decision has yet been made on the leave application.
[10] On March 4, 2024, Mr. Drizen commenced this action against Capital. The claim is based on the allegations of impropriety he made against Capital in the Small Claims Court proceeding. In fact, as Capital’s counsel has pointed out, Mr. Drizen’s Statement of Claim in this action contains duplicate paragraphs from his Notice of Appeal to the Divisional Court. Capital’s factum contains a compendium of those overlapping paragraphs. Basically, all of the substantive paragraphs in the Notice of Appeal have their parallel in the Statement of Claim.
Issue and Applicable Authorities
[11] The sole issue in this motion is whether this action is an abuse of process because it is res judicata. As stated above, I find that it is on both counts.
[12] Under Rule 21.01(3)(c) and (d), a defendant may move to have an action stayed or dismissed on the grounds that:
(c) another proceeding is pending in Ontario or another jurisdiction between the same parties in respect of the same subject matter; or
(d) the action is frivolous or vexatious or is otherwise an abuse of the process of the court.
[13] The scope of the principle of res judicata, which prevents the re-litigation of issues previously and finally decided, was set out over 150 years ago in the leading British case of Henderson v. Henderson (1843), 3 Hare 100, 67 E.R. 313 at 319 (Ch.). In that decision, which was adopted into Canadian law by our Supreme Court (see, for example, Maynard v Maynard, [1951] S.C.R. 346; Grandview v. Doering, [1976] 2 S.C.R. 621), Vice-Chancellor Wigram stated at p. 115:
I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward only because they have from negligence, inadvertence or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.
(as cited in Grandview v. Doering, at p. 634)
[14] The breadth of the principle of issue estoppel and its relationship to res judicata is set out by Laskin J.A., writing for the Court of Appeal for Ontario in Minott v. O'Shanter Development Co. (1999), 42 O.R. (3d) 321 (C.A.), at paras. 16-17, as follows:
16 I will first discuss the general principles underlying issue estoppel and then apply them to this case. Issue estoppel prevents the relitigation of an issue that a court or tribunal has decided in a previous proceeding. In this sense issue estoppel forms part of the broader principle of res judicata. Res judicata itself is a form of estoppel and embraces both cause of action estoppel and issue estoppel. Cause of action estoppel prevents a party from relitigating a claim that was decided or could have been raised in an earlier proceeding... Issue estoppel is narrower than cause of action estoppel. It prevents a party from relitigating an issue already decided in an earlier proceeding, even if the causes of action in the two proceedings differ.
17 The overall goal of the doctrine of res judicata, and therefore of both cause of action estoppel and issue estoppel, is judicial finality. "The doctrine prevents an encore, and reflects the law's refusal to tolerate needless litigation."
[Footnotes omitted]
[15] The rationale for the application of the principle of issue estoppel was pithily described by Binnie J., writing for the Supreme Court of Canada in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, at para. 18, as follows:
18 The law rightly seeks a finality to litigation. To advance that objective, it requires litigants to put their best foot forward to establish the truth of their allegations when first called upon to do so. A litigant, to use the vernacular, is only entitled to one bite at the cherry.
[16] The three-part test for the application of issue estoppel was adopted by the majority of the Supreme Court of Canada in Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248, at p. 254. The Angle test was originally set out in the decision of Lord Guest of the British House of Lords in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), [1967] 1 A.C. 853, at p. 935, as:
(1) that the same question has been decided;
(2) that the judicial decision which is said to create the estoppel was final; and,
(3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies...
(See also Danyluk v. Ainsworth Technologies Inc., at para 25.)
[17] I add the following additional principles, derived from further authorities, which are relevant to the consideration of issue estoppel in this case:
The issue out of which the estoppel is said to arise must have been "'fundamental" to the decision arrived at in the earlier proceedings (Angle v. Minister of National Revenue, at pp. 255, 265-66).
The breadth of issue estoppel "...extends to the material facts and the conclusions of law or of mixed fact and law ('the questions') that were necessarily (even if not explicitly) determined in the earlier proceedings" (Danyluk v. Ainsworth Technologies Inc., at para. 24).
Issue estoppel encompasses "issues which, although not expressly raised in the previous case, are necessarily assumed in it or negatived by it" (Allen v. Morrison (2006), 139 C.R.R. (2d) 324 (Ont. S.C.), at para. 21, citing Sopinka, Lederman and Bryant, The Law of Evidence in Canada, 2nd ed. (Toronto: Butterworths, 1999), at p. 1084-85)).
The court has the discretion to refuse to apply issue estoppel when to do so would cause unfairness or work an injustice (Minott v. O'Shanter Development Co., at para 49; Danyluk, at para. 33). In doing so, the court "should stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice" (Danyluk, at para. 80).
But that discretion must be "very limited in application" (General Motors Canada Ltd. v. Naken, [1983] 1 S.C.R. 72, at p. 101, speaking of the discretion regarding res judicata).
[18] I note that in Glycobiosciences Inc. v. Herrero and Associates, 2023 ONSC 4143, a Divisional Court application in which Mr. Drizen represented his corporation, the proceeding was dismissed as an abuse of process. The dismissal was granted on similar grounds to those offered by Capital in this motion. Not only was the issue raised in the application before the Divisional Court raised in a previous, unsuccessful appeal, but the initiating pleading quotes from paragraphs of the applicant’s factum in the appeal. As Matheson J. wrote:
15 Most significantly, this Application is grounded on the allegations of bias that have been dismissed by the Court of Appeal. The Notice of Application expressly quotes numerous paragraphs from the Applicant's factum on the appeal, and shows that the arguments about bias, including the conduct of the motion and the role of a self-represented party, were advanced at the Court of Appeal. The then Appellant was given permission to file supplementary materials to address how the costs decision related to the bias argument being advanced in the appeal. The allegations of bias and related matters that also ground the Application for Judicial Review have been canvased and finally determined against the Applicant by the Court of Appeal.
16 This Application is an attempt to re-litigate issues already decided by the Court of Appeal and an attempt to avoid the consequences of not pursuing the available appeal process. It is an abuse of process.
[19] In his arguments before me, Mr. Drizen was unable to identify what was different about the issues raised in this action as opposed to those raised in the motion to dismiss in the Small Claims Court or the appeal before Lemay J. He could only refer to a higher financial limit and to the availability of discovery in this court. Those are not issues, they are processes. The processes in the Small Claims Court are tailored to self-represented litigants like Mr. Drizen and are proportional to the amounts in question in the action; here less than $3,000.
[20] Mr. Drizen also relied on something he claimed that McLean D.J. had said during the argument of the motion before him regarding the limits of his jurisdiction. Unsure of how the statement, if made, could be relevant to the motion before me, I asked him to show me where the deputy judge had said that. He was unable to do so. He did not have the transcript of the hearing before him. When asked whether the issue was raised on the appeal before Lemay J., he denied that the transcript was before LeMay J.
[21] Mr. Christensen took issue with that claim, insisting that the transcript had indeed been placed before Lemay J.
[22] I put the matter over to the afternoon to allow Mr. Christensen to produce the Divisional Court appeal book. He did so and placed it on Case Centre. It showed that the transcript was indeed before the court. However, Mr. Drizen announced that he would not attend court that afternoon, despite my warning that I would consider the issue he raised of the presence of the transcript of McLean D.J. in the Divisional Court appeal.
Conclusion and Order
[23] In short, the three Angle questions can be answered in the affirmative in this case. The same questions raised in this action were decided in the small claims court action and subsequent appeal. The decision of McLean D.J., as upheld by LeMay J. was final. The same parties are involved in both actions. Further, I see no reason to exercise my discretion to allow this proceeding to continue despite it being an abuse of process. To allow it to continue would work an injustice.
[24] Mr. Drizen pointed out that LeMay J. properly found that his Divisional Court appeal was not an abuse of process. As sanguine as that finding may be to Mr. Drizen, it is irrelevant to this motion. LeMay J. carefully added that he had no comment on whether this action was an abuse of process. He left that to the presiding motion judge. Of course, he also found that the appeal was bereft of merit.
[25] In the result, I find that this action is an abuse of process and dismiss it.
Costs
[26] If the parties are unable to resolve costs on their own Capital may submit its costs submissions of up to three pages, double-spaced, one-inch margins, plus a bill of costs/costs outline and offers to settle within 14 days of release of this endorsement. It need not include the authorities upon which it relies so long as they are found in the commonly referenced reporting services (i.e., LexisNexis Quicklaw, or WestlawNext) and the relevant paragraph references are included. Mr. Drizen may respond in kind within a further 14 days. No reply submission will be accepted unless I request it. If I have not received any submissions within the time frames set out above, I will assume that the parties have resolved the issue and will make no costs order.
Released: July 30, 2024