COURT FILE NO.: CV-11-426057
DATE: 20120618
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
TEPLITSKY COLSON LLP, GARY CAPLAN, 2004782 ONTARIO LIMITED, 717 PAPE INC., PETER L. BIRO, CDG MANAGEMENT LIMITED, CRERAR PROPERTY CORP., DANFORTH PROPERTIES LIMITED, GEORGE FOULDIS, GOODMAN AND CARR, JONATHAN LISUS, McCARTHY TETRAULT LLP, THE MUTUAL TRUST COMPANY (now known as the CLARICA TRUST COMPANY), RAYMOND RAPHAEL, RAYMOND RAPHAEL PROFESSIONAL CORPORATION, STEWART J.L. ROBERTSON, NICHOLAS STANOULIS, DONNA STANOULIS, CHRISTINA STANOULIS, GARY STANOULIS, THOMAS STANOULIS, THOMAS M. T. SUTTON, CHRIS TATSIS, PANAGIOTA TATSIS, TONU TOOME, TOOME LAAR & BELL, THE CITY OF TORONTO
Applicants/Moving Parties
- and -
WILLIAM MALAMAS, also known as VASILIOS MALAMAS, APOLLCO DEVELOPMENTS LTD., APOLLO REAL ESTATE LIMITED, APOLLCO PROPERTIES LIMITED, APOLLCO CONSTRUCTION LTD., APOLLO LTD., PALLAS PROPERTIES INC.
Respondents
BEFORE: Justice Newbould
COUNSEL: William S. O’Hara, Ray Thapar, Lawrence F. Wallach, Andrew M. Stikuts, Sean Dewart, Daniel Iny and Michael G. Tweedie for the Applicants
William Malamas appearing in person and for the respondent corporations
Date Heard: June 11 and 12, 2012
Newbould J.
[1] This application and various motions for security of costs have been brought by twenty-seven parties adverse to William Malamas and his companies in fourteen different actions (the “Participating Actions”). The application of all applicants has been brought in one application pursuant to a procedural order made by me.[^1]
[2] The Applicants Parties seek an order:
a) striking Mr. Malamas’ defence to the vexatious litigant applications;
b) declaring Mr. Malamas a vexatious litigant pursuant to section 140 of the Courts of Justice Act, R.S.O. 1990, c.C.43;
c) permanently staying or dismissing the Participating Actions pursuant to section 140 of the CJA and Rule 60.12 of the rules of civil procedure;
d) prohibiting Mr. Malamas from commencing, continuing or taking any step in any proceeding in any Ontario Court without prior leave of a judge and without payment of all costs orders then outstanding;
e) in the alternative, an order requiring Mr. Malamas to post security for costs in the Participating Actions in the amounts set out in the respective motion materials and supporting affidavits, or, alternatively, in such other amount as the court deems just, and staying the Participating Actions until such time as the said amount is paid in full.
Facts
[3] Prior to the 1980s, Mr. Malamas was a real estate developer who owned numerous properties in the GTA, including the Pape and Danforth area.
[4] The properties appear to have been heavily leveraged. When the recession hit in the late 1980s and early 90s, the value of the properties fell below the mortgage values. Mr. Malamas was unable to maintain the mortgages in good standing and lost the properties in the mortgage proceedings that ensued. The properties which play a central part in the various actions are two properties on Danforth Avenue and one on Broadview Ave.
[5] A large percentage of the Participating Actions involve actions against lawyers who acted for Mr. Malamas and his corporations. These actions generally involve claims that his lawyers caused his actions in which they acted for him or his corporations to fail. Such claims necessarily resurrect issues decided in those actions because the allegations are that absent the fault of his lawyers, he would have won the actions. Examples follow.
(i) 1992 Lease and Libel Actions leading to the 2005 Lisus Action
[6] Prior to 1992, Mr. Malamas was the landlord of property at 659-671 Danforth Avenue. The National Bank of Greece was a tenant at the premises.
[7] Mr. Malamas and the Bank had a dispute about the lease. In 1992, he sued the Bank to recover alleged arrears of rent and damages for breach of the lease in court file number 92-CQ-18073 (the “Lease Action”). The Bank responded by suing Mr. Malamas for libel (the “Libel Action.”)
[8] Mr. Malamas retained Jonathan Lisus, then a lawyer at McCarthy Tetrault, to represent him in the proceedings. Mr. Lisus was assisted by his then associate, Thomas Sutton.
[9] The Lease Action and the Libel Action were scheduled to be tried together in November 1999. The Bank abandoned the Libel Action just before trial. The trial of the Lease Action began on November 15, 1999 before Mr. Justice Wright.
[10] Shortly after the trial began, Justice Wright made certain remarks and encouraged the parties to try settling the matter. On November 16, 1999, the parties reached a settlement, and the court endorsed the record accordingly. The Lease and Libel Actions were dismissed without costs. Within days, Malamas disavowed the settlement.
[11] A trial of an issue was held before Mr. Justice Juriansz to determine whether the parties had reached a binding settlement. Mr. Malamas lost and the settlement was confirmed. Mr. Malamas unsuccessfully appealed the decision of Justice Juriansz to the Court of Appeal.
[12] Mr. Malamas also commenced an application to assess McCarthy Tetrault’s accounts. He alleged, as part of that application, that Mr. Lisus and Mr. Sutton had engaged in fraud.
[13] On April 9, 2001, Madam Justice Chapnik dismissed Mr. Malamas’ application, with costs on a substantial indemnity basis, and concluded that there was not “one iota” of evidence to support his allegations of fraud.
[14] Mr. Malamas appealed Justice Chapnik’s findings. Although the Court of Appeal allowed a partial assessment of McCarthy Tetrault’s accounts, it did not disturb Justice Chapnik’s findings regarding the absence of fraud.
[15] In 2005, Mr. Malamas sued Mr. Lisus, Mr. Sutton and McCarthy Tetrault for damages in the Lisus Action. Mr. Malamas alleged, among other things, that while representing him in the 1992 Lease and Libel Actions, Mr. Lisus and Mr. Sutton “developed an attitude of increasing malice” towards him, and that Lisus falsified evidence during the trial of an issue before Justice Juriansz in respect of the terms of settlement which had been reached with the Bank. Those allegations are the same allegations that Mr. Malamas unsuccessfully made in the trial before Justice Juriansz.
(ii) Stanoulis/Dibiase Actions leading to the 1994 Stanoulis defamation action leading to the 2010 Biro action
[16] In 1992, Thomas and Christina Stanoulis commenced an action against Mr. Malamas’ company, Apollo Real Estate Limited (the “1992 Stanoulis Action”).
[17] Simultaneously, Cathy and Alphonso DiBiase commenced an action against Apollo Real Estate Limited as court file number 92-CU-47898 (the “DiBiase Action”).
[18] The Stanoulis and DiBiases were owners of buildings on Danforth Avenue which were adjacent to a building being constructed by Mr. Malamas’ company, Apollo Real Estate Limited. These parties alleged, among other things, that the new building built by or at the direction of Apollo encroached on their properties and caused them damage.
[19] In 1994, in a separate action, Gary, Nick and Tom Stanoulis (other members of the Stanoulis family) sued Mr. Malamas for defamation for allegedly picketing outside of their homes, work and other places, while shouting defamatory statements through a megaphone (the “1994 Stanoulis Action”). Mr. Malamas retained Peter Biro (“Biro”), a lawyer at Goodman and Carr, to represent him in that defamation action.
[20] In April 1995, minutes of settlement were signed in the 1992 Stanoulis and DiBiase Actions. Mr. Malamas acknowledged in the minutes of settlement that all claims, counterclaims and crossclaims in those actions were being extinguished. The defamation action was not part of the settlement.
[21] After the 1992 Stanoulis and DiBiase Actions were settled, Mr. Malamas terminated Mr. Biro’s retainer. He amended his defence in the 1994 Stanoulis defamation action to include a counterclaim which resurrected allegations about the construction of the building on Danforth Avenue, the same allegations that had been settled and extinguished by the Minutes of Settlement in the 1992 Stanoulis and DiBiase Actions.
[22] In July 2010, Mr. Malamas commenced an action against Mr. Biro and Goodman and Carr for damages. He alleged that Mr. Biro put pressure on him to accept the settlements in the 1992 Stanoulis and DiBiase Actions, that the minutes of settlement in those actions were altered after he signed them and that Mr. Biro deliberately failed to raise various issues in Malamas’ defence to the 1994 Stanoulis Action. Mr. Malamas now seeks to re-try the validity of the settlement.
(iii) 2000 Edmonton Park Action leading to the 2008 Raphael Action
[23] In the 1990s, Mr. Malamas was a tenant in a unit in Richmond Plaza. The landlord was Edmonton Park Construction Limited (“Edmonton Park”). The lease gave Mr. Malamas an exclusive right to operate a donut shop in the plaza.
[24] Mr. Malamas subleased the unit to 866022 Ontario Ltd. (“866”), which operated a donut and deli from the unit. Edmonton Park allowed 866 to expand its business into a neighbouring unit. Mr. Malamas alleged that this contravened the terms of his lease with Edmonton Park and caused him damages.
[25] In November 2000, Mr. Malamas sued 866, Edmonton Park and its officers in the Edmonton Park Action. In January 2002, the defendants in the Edmonton Park Action brought a motion to dismiss the claim.
[26] Acting for himself, Mr. Malamas swore an affidavit in response to the motions. When he was cross-examined by opposing counsel, he refused to answer questions relating to his alleged damages, or when they were discovered.
[27] Mr. Malamas lost the motion and the Edmonton Park Action was dismissed. Justice Jenkins found that Mr. Malamas had complained of the conduct on which the Edmonton Park Action was based in a letter dated September 22, 1994 (more than six years earlier) and, as such, the claim was statute-barred.
[28] Mr. Malamas appealed Justice Jenkins’ decision. He initially consulted a lawyer named Tonu Toome (now deceased) and then retained Raymond Raphael to represent him on the appeal.
[29] Mr. Malamas’ appeal was dismissed with costs. The Court of Appeal agreed with Justice Jenkins’ finding that Mr. Malamas’ cause of action had accrued more than six years before the action was commenced.
[30] Six years later, Mr. Malamas sued Mr. Toome, Mr. Raphael and others (the “Raphael Action”). He seeks $6 million in damages. Mr. Malamas alleges that Mr. Toome, who never acted for him, and Mr. Raphael “developed an attitude of increasing malice towards him” and deliberately sabotaged his appeal before the Court of Appeal to protect Justice Jenkins from criticism by the Court of Appeal. Mr. Malamas also maintains that his Edmonton Park Action was commenced within the appropriate limitation period, although that issue was fully litigated years earlier.
(iv) 2001 Bank Action leading to the 2009 Crerar Action leading to the 2011 Hodder Action
[31] In 2001, Mr. Malamas commenced an action against the National Bank of Greece, 2004782 Ontario Limited and CGD Management, Mutual Trust, Clarica Trust Company and others (the “Bank Action”). In its original form, the statement of claim in the Bank action as against 2004782 Ontario Limited and CGD Management (the “Mortgagees”) sought a declaration of ownership with respect to three properties at 671 Danforth Avenue, 668-658 Danforth Avenue and 778 Broadview Avenue in Toronto, an injunction to restrain the defendants from selling, foreclosing or otherwise disposing of the properties, and $226.5 million as damages for interference with economic activity, interference with contractual relations, inducing breach of contract, conspiracy to injure, abuse of process, loss of enjoyment of life, mental distress and mental anguish. Mr. Malamas later amended his claim to withdraw these allegations and limited his claim to breach of contract and negligence.
[32] Mr. Malamas alleged, among other things, that the Bank had conspired with “the Stanoulises and other conspirators” to prevent him from re-financing the mortgages on the properties (which had gone into default and which the Bank was attempting to enforce).
[33] In December 2001, Mr. Malamas moved for an interlocutory injunction to restrain the defendants from enforcing the three mortgages and notices of sale until trial. He was represented on that injunction motion by Gary Caplan, then a lawyer with Teplitsky Colson LLP.
[34] Mr. Malamas lost the motion. Justice Lederman found, among other things, that Mr. Malamas had defaulted on the taxes and had taken no steps to make mortgage payments on the properties as of the date of the motion. For that and other reasons, he was not entitled to an injunction.
[35] Eight years later, in August 2009, Mr. Malamas commenced an action against Gary Caplan, Teplitsky Colson and others (the “Crerar Action”) for damages exceeding $50 million. Mr. Malamas alleges, among other things, that the Teplitsky Colson LLP defendants developed an attitude of malice towards him and deliberately lost the injunction motion before Justice Lederman.
[36] In the meantime, the Bank moved successfully to strike Mr. Malamas’ claim in the Bank Action. Mr. Malamas delivered a fresh as amended statement of claim in 2007, wherein he sought damages against the Bank in the amount of $66 million for abuse of process, intentional interference with contractual relations, etc.
[37] In October 2009, the Bank brought a motion for an order requiring Mr. Malamas and his companies to post security for the costs of the Bank Action. Mr. Malamas was represented on that motion by J. Gardner Hodder and Guillermo Schible, formerly of Polten & Hodder.
[38] Mr. Malamas lost the motion. Master Sproat found that there was good reason to believe that numerous aspects of Malamas’ claim were frivolous and vexatious and ordered Mr. Malamas to post $75,000 as security for the costs of the Bank Action. The costs have not been paid to date.
[39] Mr. Malamas terminated the solicitor-and-client relationship with Polten & Hodder and appealed Master Sproat’s order. On April 19, 2010, his appeal from Master Sproat’s order was dismissed with costs.
[40] In March 2011, Mr. Malamas sued Hodder, Schible and their former law firm for millions of dollars in damages in the “Hodder Action”. Mr. Malamas alleged, among other things, that the Hodder defendants developed an attitude of malice towards him and deliberately caused him to lose the security for costs motion before Master Sproat. He seeks a trial of the issues already decided by Master Sproat and upheld on appeal.
[41] In summary, Mr. Malamas has sued the following lawyers:
Date
Lawyer
Claimed
Causes
2005
Jonathan Lisus
$4.5 million
negligence, intentional infliction of mental distress, mental anguish, loss of enjoyment of life, punitive damages, aggravated damages and exemplary damages
Thomas Sutton
McCarthy Tetrault
2008
Tonu Toome
$6 million
negligence, breach of fiduciary duty, intentional infliction of mental distress, mental anguish, loss of enjoyment of life, punitive damages, aggravated damages and exemplary damages
Raymond Raphael
Toome Laar & Bell
Raphael Professional Corporation
2009
Teplitsky Colson
$12 million
negligence, breach of fiduciary duty, intentional interference with economic relations, deceit, conspiracy to injure, international infliction of mental distress, mental anguish and loss of enjoyment of life
Gary Caplan
2010
Goodman and Carr
$7 million
negligence, breach of fiduciary duty, intentional interference with economic relations, deceit, conspiracy to injure, intentional infliction of mental distress, mental anguish and loss of enjoyment of life
Peter Biro
2011
Gardiner Roberts
$79 million
fraudulent misrepresentation, intentional infliction of mental distress, mental anguish and loss of enjoyment of life, punitive damages, aggravated damages and exemplary damages
Howard Wolch
2011
J. Gardner Hodder
$5 million
negligence, breach of fiduciary duty, intentional infliction of mental distress, mental anguish, loss of enjoyment of life, punitive damages, aggravated damages and exemplary damages
Guillermo Schible
Hodder Solicitors
[42] The total damages sought by Mr. Malamas in the Participating Actions alone exceed $300 million.
[43] In nearly every action commenced by Mr. Malamas over the last 20 years, he has claimed that each of the defendants in each of the proceedings were the direct cause of his personal and financial ruin. This allegation is repeated in the Participating Actions.
[44] In the 2009 security for costs motion, the Master Sproat considered Mr. Malamas’ allegations that the Bank was the direct cause of Mr. Malamas’ financial demise. The Master noted that in the original version of his statement of claim in the Bank Action, Mr. Malamas had acknowledged that, in fact, the recession and market conditions were responsible for his financial downfall. The Master also concluded that the large pool of defendants that were alleged to have caused Mr. Malamas’ personal and financial ruin were a good basis for determining that his action against the Bank was unlikely to succeed:
…even if the plaintiffs were able to establish that the Bank engaged in litigation for an improper and collateral purpose of causing financial ruin, it is clear that the plaintiffs were confronted with significant expenditures of legal fees in relation to over 30 actions in which Malamas was plaintiff and/or defendant. The litigation was not only with the Bank. He had protracted litigation with others. He has been described as an experienced and knowledgeable litigator. These matters lead me to the conclusion that there is good reason to believe that the plaintiff’s action is without merit and is unlikely to succeed because I have doubt that the plaintiff can establish that the Bank’s alleged misconduct, in isolation, caused the plaintiff’s financial ruin.
[45] Mr. Malamas’ has made allegations of sinister persons conspiring to cause him harm for many years. In Malamas v. National Bank of Greece, Master Sproat referred to Mr. Malamas’ assertions on discovery:
It is an undisputed fact that since the beginning of the 90’s, earlier, ’89, I have been struck by organized crime with an army of saboteurs, corrupters, provocateurs, arsonists, my buildings, they have been struck. And also I have been struck with a myriad of legal proceedings. I went to the police. I complained, I can say for sure more than 60 times...
[46] In June 1997 Mr. Malamas wrote to Mr. Ross Morrison, who had acted for Mr. Malamas in the Court of Appeal in a matter, complaining that Mr. Morrison had deliberately taken steps to cause his appeal to fail. It included many allegations, including allegations against the Stanoulis family and against other lawyers who had acted for him. He asserted that Mr. Shastri and Mr. Kagan had refused to take steps to prosecute Apollo's claims in order to block incriminating evidence against the City and the Stanoulises from being presented in court. The letter was copied to the three judges who had sat on the appeal in the Court of Appeal and to other judges who had been involved in the cases in which other lawyers complained of in the letter had acted.
[47] On December 1, 2005 Mr. Malamas wrote to Justice Stinson complaining that Mr. Sterns had failed to act for him properly. In the letter he stated that in 2001, Raymond Raphael, who represented him in the Court of Appeal, deliberately failed to point to the merits of his case and deliberately caused his appeal to be dismissed.
[48] In 2010 Malamas wrote a letter to the Justice Then, Justice Sanderson and me in which he stated as follows:
Nicholas [Stanoulis] is an alleged liar, perjurer, provocateur, saboteur, arsonist and user of terror and mental torture. Nicholas and his brother Gary, allegedly, are two modern day outlaws and war lards. They sit on top of an army, made out of drug users, drug addicts, psychopaths and generally persons who engage in unlawful activities. Their army struck my construction and development business and the buildings owned directly or indirectly by me, with vandalism, acts of sabotage and dirty tricks. I, my wife and children, have lived under their rule for nearly a quarter of a century now. Our lives have been irreversibly ruined. Our injuries cannot be compensated with money.
[49] During the course of the case management of the Participating Actions, Mr. Malamas has written several letters to me alleging improper activity on the part of lawyers in these actions. Examples are:
William O’Hara and Gardiner Roberts
It is obvious that you and the person who gave you such advice, are fabricating evidence to be used against me for ulterior and improper purposes.
David Sterns
In my opinion, you have perpetrated a fraud against the court and you have concerns that the alleged fraud will be revealed.
Stanoulis, Andrew Weretelnyk, Larry Wallach
Mr. Stanoulis’ draft order dated March 1, 2005, approved by Mr. Weretelnyk and Mr. Wallach, was not only inaccurate, but it was outright false and was conceived with the intent to deceive Madam Justice Sanderson and Justice Newbould.
Ray Thapar
I stand to be corrected, but, in my opinion, Mr. Thapar is wrong. What is troubling me is that Mr. Thapar is intentionally wrong.
[50] Mr. Malamas has also made complaints to persons in authority outside of the court system. For example:
(a) On August 24, 1994 Mr. Malamas wrote to William J. McCormack, the chief of police complaining of an alleged conspiracy of the Stanoulis family to acquire a building owned on Danforth Avenue by Apollo. He complained of plots, the spreading of rumours, the seeking of services of persons with ties to organized crime, the tapping of his telephone, causing an officer of a trust company to commit perjury, causing the city of Toronto to take various steps against his interests, wrecking his car and other allegations.
(b) On February 15, 2007 Mr. Malamas wrote to the Premier of Ontario and another minister in the Ontario government and to the Chiefs of police in Toronto and Durham. He complained that for the last 19 years through the services of organized crime he had been struck and tortured by a guerrilla army of saboteurs, harassers, provocateurs, thieves, drug addicts, drug dealers, arsonists and hitmen and that he had reported most of these events to the Toronto and Durham police forces but the police had taken no meaningful steps. He said that the evidence he had pointed unmistakably to Nicholas and Gary Stanoulis, both lawyers, and other members of their family as being the masterminds. He complained that the Stanoulises had influence with "rotten apples" in the police forces. He complained that the City of Toronto had taken extraordinary steps to cover up alleged Municipal corruption between itself and the Stanoulises including interfering with the administration of justice. He alleged a conspiracy amongst the Stanoulises, the City of Toronto, police "rotten apples" and at least 10 lawyers. He alleged that the Stanoulises had engaged the Hells Angels in order to silence him.
[51] Courts have many times rejected Mr. Malamas’ allegations of fraud and conspiracies as lacking foundation. For example:
1995
Mercer J.: “Mr. Malamas’ behaviour is quite extraordinary, to the extent that one suspects that he would benefit from a visit to a psychiatrist.”
2001
Chapnik J.: “In fact he went so far as to allege “fraud” on the respondent’s part. The applicant is an experienced litigant. He must know that his conduct in making these allegations is, in the context before me, to say the least, over reaching...There was not one iota of evidence to support the allegations made by the applicant in para 21 of his factum and in his related submissions to the Court.”
2006
Judge Baker: “The Plaintiff’s case was heavily enhanced by an allegation, made in the pleadings and vigorously pursued at trial, that this was not simply a case of financially challenged debtor but that the Defendant was in a league with organized crime in the persons of named individuals and practicing lawyers (Ex. 1-3) whose modus operandi wais to harass Malamas and do him harm… ...
“There is not a shred of evidence to connect the Defendant with organized crime as per the Plaintiff’s Theory.”
2007
Boswell J: “The Defendant alleges that the Plaintiff, and more particularly, its principal, Mr. Izadi, is part of a scheme or “plot” as he calls it, in concert with organized crime, to sabotage the project at 535 Pape Avenue...
“There is no evidence before this Court having any probative value whatsoever that serves to support the Defendant’s theory that the Plaintiff has participated in an organized conspiracy theory against him. There is no basis for a finding of palpable and overriding error with respect to the trial judge’s failure to find as a fact that such a scheme or conspiracy existed. There was no compelling evidence offered at the trial of this action that would serve to support the Defendant’s Claim, as pleaded....”
2011
Newbould J: “The affidavit of Mr. Malamas sworn July 22, 2011 which he enclosed with this letter of October 12, 2011 contains scurrilous allegations against Mr. Stanoulis and his family which are highly improper.”
2012
Newbould J.: “With respect to the motion that Mr. Malamas seeks to bring for a declaration that the defendants Chris and Panagiota Tatsis and their counsel have committed an alleged fraud, such procedure would be improper even if there were grounds to support it. Allegations of fraud are not decided by motions. In any event, there are absolutely no grounds to support the allegation of fraud. The supposed grounds referred to by Mr. Malamas, being various correspondence with various judges, have no merit whatsoever. The bald allegation regarding steps by Chris and Panagiota Tatsis with respect to 671 Danforth Avenue is unsupported by any cogent evidence...”
[52] During the last three years, Mr. Malamas has taken every technical and procedural point that he has thought possible, all without success, including refusing to allow pleadings to be reopened when some unintended step was not taken by one of the parties and he had noted them in default. He has appealed every decision of Master Sproat and Master McAfee, without success, and in one case sought leave to appeal to me from a decision of Master McAfee that had been decided in his favour. He has attempted to appeal several of my procedural rulings directly to the Court of Appeal, and in spite of being made aware by Justice Gouge that there is no jurisdiction in the Court of Appeal for such appeals, he continued with those appeals which were ultimately dismissed.
[53] On more than one occasion, Mr. Malamas has sought to have me remove counsel for alleged conflicts of interest, for which there has been no cogent evidence of any conflict or reason to remove counsel. At the opening of the hearing of this motion, Mr. Malamas renewed such attempts with respect to Mr. O'Hara, in spite of an earlier ruling of mine that there was no basis for Mr. O'Hara to be removed. He also repeated an earlier complaint that Mr. O’Hara had no authority to file the application on behalf of all of the applicants, a complaint that I had previously ruled against.
[54] Mr. Malamas has on several occasions breached procedural rulings made by me, including bringing motions without leave as required by my procedural ruling and bringing motions before other masters after Master McAfee had been chosen to hear all masters’ motions. A few examples follow.
[55] Pursuant to Procedural Order No. 1, all master’s motions were directed to be heard by Master McAfee, with prior leave being required. Notwithstanding this requirement, Mr. Malamas moved before Master Graham on August 16, 2011, a date not cleared in advance with counsel, which was also a requirement of the procedural order, for an order granting him leave to personally represent his corporate entities in the vexatious litigant application and on the motions for security for costs. Master Graham adjourned the motion sine die, to be scheduled by me in accordance with my procedural order.
[56] A few weeks later, Mr. Malamas served another motion record, again without leave and on a date not cleared with counsel in advance, for an order that Mr. O’Hara be removed as solicitor of record for the Teplitsky Colson LLP defendants, on the basis of an alleged conflict of interest. Master Dash similarly adjourned Malamas’ motion, to be dealt with by me in accordance with Procedural Order No. 1.
[57] Pursuant to Procedural Order No. 7, all parties, including Mr. Malamas, were directed from taking any steps in the case managed actions whatsoever, including, but not limited to, bringing a motion, serving a summons to witness, serving a notice of cross-examination or conducting an examination of any party, without prior written leave. This ruling was required by several instances of Mr. Malamas ignoring prior procedural rulings. Notwithstanding this ruling, Mr. Malamas delivered an affidavit with respect to the alleged conflict of interest of Mr. O’Hara and two additional motion records for various other relief without any leave.
Applicable legal principles
[58] Section 140(1) of the CJA provides a judge with authority to issue a vexatious litigant order. It provides:
s. 140 (1) Where a judge of the Superior Court of Justice is satisfied, on application, that a person has persistently and without reasonable grounds,
(a) instituted vexatious proceedings in any court; or
(b) conducted a proceeding in any court in a vexatious manner,
the judge may order that,
(c) no further proceeding be instituted by the person in any court; or
(d) a proceeding previously instituted by the person in any court not be continued,
except by leave of a judge of the Superior Court of Justice.
[59] This provision is a codification of the inherent jurisdiction of the Superior Court to control and to prevent abuses of its own process, by authorizing the judicial restriction of a litigant’s right to access any court, including proceedings in appellate courts. See Kalaba v. Bylykbashi, 2006 3953 (ON CA), 23 R.F.L. (6th) 235 (Ont.C.A.) at para. 30, leave to appeal to S.C.C. refused [2006] S.C.C.A. No. 144 (S.C.C.).
[60] While a vexatious litigant order restricts a vexatious litigant's access to the courts, it does not deny the litigant access to the courts. It merely imposes a procedural step upon certain litigants in the interest of ensuring that vexatious proceedings are not pursued before our courts: see Ontario v. Coote, 2011 ONSC 858, aff’d 2011 ONCA 563.
[61] Non-judicial proceedings can be taken into account, including complaints to professional bodies and other individuals. A respondent's behavior both in and out of court can be relevant. See Bishop v. Bishop, 2011 ONCA 211, 2011 O.J. No. 1290 (C.A.), at paras. 4 and 6.
[62] The adjective "vexatious" is defined by the Concise Oxford Dictionary, 11th ed. (Oxford: University Press, 2004) as:
such as to cause vexation.
Law not having sufficient grounds for action and seeking only to annoy the defendant.
To "vex" is defined as "to anger by a slight or a petty annoyance; irritate".
[63] In Re Lang Michener et al. v. Fabian et al., (1987), 1987 172 (ON SC), 59 O.R. (2d) 353 (H.C.J.), at para. 19, Henry J. identified certain typical features of vexatious proceedings as follows:
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;
g) the respondent's conduct in persistently taking unsuccessful appeals from judicial decisions can be considered vexatious conduct of legal proceedings.
[64] This list is neither exhaustive nor is it necessary for a litigant to meet all of the various factors identified by Henry J. The categories of vexatious proceedings are never closed and whether a litigant is vexatious must be determined by an objective standard: Mascan Corp. v. French, (1998), 1988 4731 (ON CA), 64 O.R. (2d) 1 (C.A.) at para. 15 and Ontario v. Deutsch, [2004] O.J. 535 (S.C.J.) at para. 21.
[65] An order under s. 140 of the CJA can made against corporations controlled by a responding party in the future. See Law Society of Upper Canada v. Chavali (1998), 21 C.P.C. (4th) 20, 1998 at para. 27, affirmed (1998), 31 C.P.C. (4th) 221 (C.A.).
Analysis
[66] Mr. Malamas asserts that he is not seeking to relitigate any issue previously determined by a court. However, that argument ignores the fact that when he sues a lawyer for improperly acting on his behalf, either in negligence, fraud or some other tort, the fundamental basis of the claim is that without the fault of the lawyer, he would have succeeded in his prior actions. Of necessity he is seeking to relitigate previous issues already decided. The same pertains to his claims that minutes of settlement that he signed were improperly caused to be signed.
[67] Mr. Malamas also asserted that his claims are valid. I will deal with some of these, which indicate to me that there appears to be nothing or very little to support any such validity. Before doing so I need to deal with the evidence of Mr. Malamas. In his responding application record, consisting of 14 volumes, Mr. Malamas has included many documents marked as exhibits to his affidavits. Mr. Malamas attended to be cross-examined on his affidavits pursuant to a procedural order. However, Mr. Malamas refused to answer every question put to him, making one procedural objection after another. His refusal to answer any question was in itself vexatious in the extreme and I put little or no weight on the assertions made by him in his affidavits.
[68] In the action against Mr. Lisus, Mr. Sutton and McCarthy Tetrault, Mr. Malamas contends that Mr. Lisus improperly made a submission in proceedings between Mr. Malamas and National Bank of Greece in which the bank was a tenant of property owned by Mr. Malamas. Mr. Malamas sued the bank to recover rent. Mr. Malamas referred in argument to opinions that he had obtained from two law firms advising him that the bank was not obliged to pay a management fee, and says that no claim for a management fee was made in the action against the bank. He complains that Mr. Lisus included a claim for a management fee in his pre-trial memorandum and in his opening statement to the trial judge, Justice Wright. The argument presented by Mr. Lisus was that a management fee was covered by the right to charge the bank costs of operating and maintaining the premises and other operating charges. During argument, Justice Wright said he had some difficulty with the argument presented by Mr. Lisus, saying that he was playing devil's advocate. While Mr. Malamas complains that Mr. Lisus should not have been making those assertions, in the end nothing flows from it. If Mr. Lisus in fact was making some argument for a claim that Mr. Malamas did not want to assert, Mr. Malamas could have stopped Mr. Lisus to correct him, but in any event it would have been a claim on which Mr. Malamas did not want to succeed.
[69] In the end, the action was settled at the urging of Justice Wright. It was those minutes of settlement that Mr. Malamas later rejected but which were upheld by Justice Juriansz. Before Justice Juriansz, Mr. Malamas asserted that the minutes of settlement made by Mr. Lisus on his behalf at the trial before Justice Wright were made without his knowledge and approval. Justice Juriansz made no finding the Mr. Malamas did not know or approve of the minutes of settlement and, during argument on this motion, Mr. Malamas could point me to no evidence that he did not know or approve of the minutes of settlement.
[70] The action against Mr. Raphael and Mr. Toome arises out of the litigation between Mr. Malamas and Edmonton Park Construction Limited. Mr. Malamas appeared on his own behalf on a motion for summary judgment by the defendants to dismiss Mr. Malamas’ action because it was statute-barred and on a cross-motion by Mr. Malamas to amend his statement of claim. The motion for summary judgment was granted dismissing the claim. At the conclusion of the hearing the judge, Justice Jenkins, endorsed the record as dismissing the motion by Mr. Malamas to amend the statement of claim. Mr. Malamas prepared notices of appeal. He then went to Mr. Toome to retain him to act for him on the appeal, but after Mr. Toome told him that the appeal was a waste of time, he declined to act and Mr. Toome referred Mr. Malamas to Mr. Raphael.
[71] Mr. Malamas pointed me to the notices of appeal that he had drafted which contain lines through some of the grounds of appeal. The two pages that contain the grounds through which lines have been made contain his initials. Mr. Malamas asserts that he did not make the changes and that they were not there when he initialed the two pages. This is hard to credit, as there would have been no purpose for Mr. Malamas initialing the two pages except to indicate his agreement to the grounds for appeal being deleted. There is no plausible evidence that Mr. Malamas did not agree to the deletions. In any event, I fail to see how that has any bearing on any claim against Mr. Raphael.
[72] Mr. Malamas also pointed to the signed order of Justice Jenkins. It reflects the endorsement of Justice Jenkins in that it orders that the motion to amend the statement of claim is dismissed. Mr. Malamas thinks that the order should have reflected the fact that Justice Jenkins did not hear submissions from him on it. There is no evidence that Mr. Raphael had anything to do with that order. To the contrary, Mr. Raphael was cross-examined by Mr. Malamas who testified that he had nothing to do with the drafting of the order and that it must have been drafted by opposing counsel to Mr. Malamas on the motion before Justice Jenkins. In any event, the order was properly drawn as it reflects the decision of Justice Jenkins.
[73] Mr. Malamas asserts that Mr. Raphael failed to support his position in the Court of Appeal by failing to argue that Justice Jenkins did not let him argue his motion to amend his statement of claim. There is no evidence of what was argued the Court of Appeal but Mr. Malamas asserts that because there was no reference in the decision of the Court of Appeal regarding his motion to amend, it must have been that Mr. Raphael did not explain his position. I see nothing in that. The fact that the decision may not have reflected everything argued is not any proof that Mr. Raphael did not properly argue the case. The real issue was whether the action was statute barred, which is what the Court of Appeal as well as Justice Jenkins dealt with.
[74] Mr. Malamas asserts that he sued Mr. Toome because he had retained him. However, Mr. Toome expressed the view that Mr. Malamas had a poor appeal and he directed Mr. Malamas to Mr. Raphael. Pursuing a claim against Mr. Toome is an indication of a vexatious claim.
[75] The action against Mr. Caplan and Teplitsky Colson arises from an action commenced by Mr. Malamas against the national Bank of Greece, Clarica Trust and others to prevent them from acting on their mortgage security which they held against two properties on Danforth Avenue and one property on Broadview Avenue. Mr. Caplan was retained by Mr. Malamas and acted on a motion to restrain the defendants from enforcing their mortgages and notices of sale. The essence of the complaint against Mr. Caplan, as explained by Mr. Malamas on the motion, was that on the cross-examination of the witness from Clarica Trust, the witness admitted that as of September 1, 1998, when Clarica Trust refused to renew the mortgage, the tax escrow and mortgage payments as of that date were up to date, and that Mr. Caplan failed to include that admission in his factum on the injunction motion before Justice Lederman and failed to argue the point before Justice Lederman. Mr. Malamas contends that had the motion been properly argued by Mr. Caplan, and the admission made by Clarica Trust been pointed out, he would have been successful in obtaining an injunction to prevent the property from being sold by the mortgagees.
[76] I see nothing in this contention. There was a reference in the factum of Mr. Caplan to the fact that the mortgage was not in arrears at the time the mortgagee refused to extend the mortgage. As well, in his endorsement, Justice Lederman referred to the argument of Mr. Caplan that the mortgagee was acting in bad faith by refusing the mortgagors their right to exercise their option to renew when not in default. There is no evidence whatsoever that Mr. Caplan failed to referred to the admission obtained on the cross-examination of the witness from Clarica Trust.
[77] More importantly, the mortgage commitment agreement provided the mortgagor with an option to renew the mortgage providing there were no events of default during the first term. In his reasons, Justice Lederman referred to an acknowledgment by the plaintiffs that there were defaults during the term with respect to the payment of taxes. He referred to the evidence that the plaintiffs took no steps to pay off the mortgages and yet they allowed the mortgagee to pay all of the outstanding tax arrears and to pay hundreds of thousands of dollars to effect bare minimum repairs to the buildings required for their operation. He also held that the damages claimed were quantifiable and as the plaintiff's interest wass purely financial, damages would suffice. He also referred to the fact that the plaintiffs were unable to provide an undertaking as to damages.
[78] Even if Mr. Malamas were able to establish that Mr. Caplan some how failed to represent him properly, which he has not been able to establish, there is no reasonable prospect to contend that the decision of Justice Lederman would have been different if the wrongdoing that Mr. Malamas asserts actually did happen. Moreover, the action was commenced on February 25, 2009, a little over eight years after the decision of Justice Lederman, and the action may well be statute-barred.
[79] I have not dealt with all of the various claims of Mr. Malamas in the Participating Actions. What they have in common are assertions of conspiracy and fraudulent or improper activity on the part of the various defendants that caused him damage. There is absolutely no cogent evidence on the record that would support any of these allegations. Mr. Malamas certainly has not in his defence of the vexatious preceding application established any cogent grounds to say that the claims are sustainable.
[80] In my view the criteria established in the authorities to determine a vexatious litigant application clearly lead to the conclusion that Mr. Malamas is a vexatious litigant. The evidence to which I have referred makes that clear.
[81] Mr. Malamas has brought several actions which would require the determination of an issue already determined in prior litigation and he seeks to relitigate the constituent issues or material facts necessarily embraced in the decisions in those cases. That is an abuse of process. See Toronto (City) v. Canadian Union of Public Emloyees, 2003 SCC 63, [2003] 3 S.C.R. 77 that para. 37, per Arbour J. and Danyluk v. Ainsworth Technologies Inc,. 2001 SCC 44, [2001] 2 S.C.R. 460 at para. 20, per Binnie J.
[82] The fact that Mr. Malamas says he does not seek to set aside any of the judgments or orders in the previous litigation does not prevent what he seeks in Participating Actions to be an abuse of process. The same argument that he makes was made by CUPE in Toronto, supra. Arbour J. dealt with it as follows:
- Each of these cases concerns the appropriate forum for collateral attacks upon the judgment itself. However, in the case at bar, the union does not seek to overturn the sexual abuse conviction itself, but simply contest, for the purposes of a different claim with different legal consequences, whether the conviction was correct. It is an implicit attack on the correctness of the factual basis of the decision, not a contest about whether that decision has legal force, as clearly it does. Prohibited "collateral attacks" are abuses of the court's process. However, in light of the focus of the collateral attack rule on attacking the order itself and its legal effect, I believe that the better approach here is to go directly to the doctrine of abuse of process. (underlining added)
[83] It also appears clear from the evidence, some of which I reviewed, that no reasonable person could reasonably expect to obtain relief in the Participating Actions. Unfounded allegations of conspiracy against banks, lawyers and others will not do. If it turns out on cogent evidence that there is a reasonable prospect of relief in any of these or other actions brought by Mr. Malamas, it may be possible that he would be able to obtain leave to commence or continue with such actions. A vexatious preceding order does not preclude future actions, but puts in place for the protection for all concerned that leave must be obtained on proper and cogent evidence.
[84] Mr. Malamas has caused an inordinate amount of time to be spent in the court process. When I was first designated under rule 37.15, I was provided a chart with 51 matters, motions and appeals to be determined. On the first attendance by all counsel and Mr. Malamas to discuss the procedures to be followed going forward, Mr. Malamas told me that he had five further motions that he wished to bring. Since I was designated, Mr. Malamas has indicated an intention to bring approximately 39 motions or appeals. As of the date when this application was commenced, Mr. Malamas had lost 36 motions and abandoned one. He had mixed results on seven motions. He has sought to appeal every decision made by a master.
[85] One of the reasons for a vexatious preceding order being made is that courts ought not to be taken up with vexatious proceedings. In Ontario v. Coote, 2011 ONSC 858, aff’d 2011 ONCA 563, van Rensburg J. pointed out that a vexatious litigation order serves the public interest in access to justice. She stated:
65 A vexatious litigant order also serves the public interest in access to justice. As Power J. noted in Roscoe v. Roscoe (2005), 2005 44186 (ON SC), 24 R.F.L. (6th) 331 (affd. on this issue at 2007 ONCA 516 (C.A.)), at para. 1:
... This court has limited resources and must, therefore, attempt to deal with the work before it in a fashion that is fair to all users of the court. 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, not only to those directly involved in the litigation, but, as well, to the system at large.
[86] It appears clear that Mr. Malamas has an animus against not only the Stanoulis family, but also against lawyers who have acted for him in the past and against other organizations such as the City of Toronto and various police forces. He continues to make unsubstantiated allegations against such lawyers and he has attempted on more than one occasion to try to have lawyers acting for parties in this vexatious proceedings application removed from the record for alleged conflicts and he has accused some of them of improper behavior without any evidence to support it. His animus has appeared clear from not only the actions he has brought but also the correspondence written to various persons, some of which I have referred to. This animus has clearly motivated him in several of the actions which he has brought, as appears clear from the pleadings and other documents and correspondence.
[87] In Re Lang Michener et al. v. Fabian et al, supra, Henry J. stated that 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. That is certainly the case with the Participating Actions, as discussed above.
[88] It is also the case that Mr. Malamas has failed to pay the cost of unsuccessful proceedings ordered to have been paid. There are outstanding cost orders owing to some of the applicants totalling approximately $29,500. There is approximately $96,300 owing to parties in other actions which are not part of the Participating Actions. This is particularly troublesome when most of the proceedings taken by Mr. Malamas have been unsuccessful.
[89] Mr. Malamas blames Mr. Raphael for his not paying cost orders to National Bank of Greece of some $40,000. He asserts that Mr. Raphael told him not to pay the costs. It is an astonishing allegation that a lawyer would advise Mr. Malamas to ignore court orders. There is no evidence to support what Mr. Malamas says. To the contrary, in an affidavit sworn by Mr. Raphael in the action against him, he swore that Mr. Malamas threatened to hold him liable for damages caused from his handling of the appeal and he urged Mr. Raphael to pay the cost orders on his behalf, which Mr. Raphael refused to do. Mr. Raphael also denied ever advising Mr. Malamas not to satisfy the cost orders and also denied a statement of Mr. Malamas that there had been an agreement between counsel in the Edmonton Park matter that the cost orders would not be enforced.
[90] Finally, Mr. Malamas has persistently taken unsuccessful appeals from judicial decisions, some of which I have referred to.
Decision
[91] A judgment shall issue as follows:
No further proceedings, including any appeals, may be taken by Mr. Malamas, the respondent corporations and any other corporations now or that in the future may be controlled by him in the Participating Actions, the action commenced against Howard Wolch and Gardiner Roberts, or any other actions or proceedings heretofore commenced by them, and such proceedings are not to be continued without leave.
Excluded from the provisions of paragraph 1 is an action by Apollo Real Estate Limited against Steambank Funding Inc. et al, Court file No. 399680/90.
No leave shall be granted in any proceeding heretofore instituted by Mr. Malamas, the respondent corporations or any other corporation controlled by him in which there are outstanding cost orders, including security for cost orders, until full payment of any such orders has been made.
[92] With respect to the motions for security for costs brought by the applicants, I see no purpose in deciding those motions at this time. They can be dealt with in any particular proceeding if and when an application is made by Mr. Malamas for leave to continue a proceeding. I realize, however, that a great deal of work has gone into those motions. In the circumstances, I adjourn them sine die and on condition that if any of the motions for security for costs are brought back on, no further material may be filed without leave of the court.
[93] The applicants are entitled to their costs. They may file brief written submissions, not exceeding five pages, along with proper cost outlines, within 15 days and Mr. Malamas shall have 15 days to respond to them in written submissions not exceeding five pages.
Newbould J.
Released: June 18, 2012
[^1]: I was originally designated under rule 37.15 to deal with all proceedings in eight actions, seven of which had been commenced by Mr. Malamas and one of which had been commenced against Mr. Malamas. Over time I was further designated under rule 37.15 to deal with a total of 15 actions involving Mr. Malamas, some of which were commenced by Mr. Malamas after I had been originally designated.