COURT FILE AND PARTIES

COURT FILE NO.: CV-12-466988

DATE: 20131122

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: George Schwartz, Plaintiff

– AND –

Her Majesty the Queen in Right of Ontario, The Ontario Securities Commission, The Attorney General of Ontario, Howard I. Wetston, Thomas Atkinson, Karen Manarin, Lori Toledano and Wayne Vanderlaan, Defendants

BEFORE: E.M. Morgan J.

COUNSEL:
George Schwartz, in person

Freya Kristjanson and Paloma Ellard, for the Defendants, The Ontario Securities Commission, Howard I. Wetston, Thomas Atkinson, Karen Manarin, Lori Toledano and Wayne Vanderlaan

Nadia Laeeque, for the Defendants, Her Majesty the Queen in Right of Ontario and the Attorney General of Ontario

HEARD: October 17, 2013

ENDORSEMENT

[1] The Plaintiff brings this action against the Ontario Securities Commission (“OSC”), its Chair, several of its staff members, the Crown, and the Attorney General of Ontario, claiming damages for misfeasance in public office and a number of different causes of action. The Defendants move to dismiss the claim under Rule 21.01(3)(d) of the Rules of Civil Procedure on the grounds that it an abuse of process, or under Rule 21.01(1)(b) to strike the Statement of Claim as disclosing no reasonable cause of action or constituting a frivolous or vexatious claim, with no leave to amend.

[2] The primary argument put forward by the Defendants is that the Plaintiff’s claim is res judicata, the crucial issue having already been decided in prior regulatory and criminal proceedings. For the reasons that follow, that characterization of the claim is correct and the action must be dismissed.

I. Prior Regulatory and Criminal Proceedings

[3] To make a long story as short as possible, the Plaintiff’s claim relates to a temporary Cease Trade Order issued by the OSC under section 127(1) and (5) of the Securities Act, RSO 1990, c S-5 on May 1, 2006. That Order, which was issued against Euston Capital Corporation (“Euston”) and the Plaintiff personally, took place within the context of public interest proceedings that the OSC initiated against the Plaintiff relating to the trading of Euston securities.

[4] The May 1, 2006 Order provided that “trading in any securities by Euston and Schwartz shall cease.” The Cease Trade Order further provided that it “shall expire on the fifteenth day after its making unless extended by order of the Commission.” The Plaintiff did not appeal this Order or seek to have it judicially reviewed.

[5] On May 11, 2006, the OSC issued a consent Order adjourning the hearing to extend the Cease Trade Order to June 9, 2006. That consent Order provided, inter alia, that, “the Temporary Cease Trade Order is continued until the hearing on June 9, 2006 or until further order of the Commission”. It is the interpretation of this May 11, 2006 continuation of the May 1, 2006 Cease Trade Order that forms the basis of the Plaintiff’s claim.

[6] On June 9, 2006, the Plaintiff appeared personally before an OSC panel and requested another adjournment of the hearing. On consent, the hearing was further adjourned to October 19, 2006. The consent Order dated June 9, 2006 provided, inter alia, that the Cease Trade Order was continued “until the hearing on October 19, 2006 or until further order of the Commission”.

[7] On October 19, 2006, the Plaintiff, by now represented by counsel, requested and received on consent, another adjournment and continuance of the Cease Trade Order on similar terms to December 4, 2006.

[8] A hearing on the further extension of the Cease Trade Order of May 1, 2006 was held by the OSC on December 4, 2006. The argument of Plaintiff’s counsel at that hearing was that the Cease Trade Order should be lifted because in issuing it the OSC had relied on insufficient evidence gathered in parallel proceedings relating to Euston and the Plaintiff in other Canadian jurisdictions. Although he certainly had the opportunity to do so, the Plaintiff did not argue at the hearing that the May 1, 2006 Order had expired, or that all subsequent extensions of that Order were invalid – i.e. the position that he now puts forward as the basis of his claim.

[9] The OSC panel hearing the matter on December 4, 2006 ruled that the Cease Trade Order initially issued on May 1, 2006 be continued. The Plaintiff never appealed the December 4, 2006 ruling or sought to have it judicially reviewed.

[10] On July 29, 2009, the OSC issued a public interest Order under section 127(1) of the Securities Act which, inter alia, prohibited the Plaintiff from trading in securities for ten years. The Plaintiff was represented by counsel at the hearing. He never appealed the July 29, 2009 Order or sought to have it judicially reviewed.

[11] Pursuant to section 9(1) of the Securities Act, there is an appeal to the Divisional Court from any such order of the OSC. The time for filing the appeal is 30 days. Needless to say, by the time the Plaintiff issued the within Statement of Claim on November 2, 2012, or the Fresh As Amended Statement of Claim on April 17, 2013, the appeal period had long expired.

[12] On March 23, 2011, an information was laid against the Plaintiff under section 122(1)(c ) of the Securities Act for violations of Ontario securities law. One of the counts with which the Plaintiff was charged was that he had traded in the securities of a company known as Unranium308 Resources Inc. (“Uranium308”) while the Cease Trade Order initially issued on May 1, 2006, and continued several times thereafter, was in effect.

[13] On February 24, 2012, the Plaintiff and an OSC staff lawyer, Cameron Watson, appeared before Bigelow J. of the Ontario Court of Justice and advised him that they had come to an agreement on a guilty plea. The Plaintiff entered a guilty plea which included the charge of breaching the Cease Trade Order. The matter was then adjourned for a sentencing hearing to take place on March 26, 2012.

[14] On March 25, 2012, the day before the sentencing hearing, the Plaintiff provided Bigelow J. with written submissions arguing, for the first time, that the Cease Trade Order of May 1, 2006, as continued on May 11, 2006, had expired on June 9, 2006 – i.e. prior to or at the commencement of the June 9 hearing, or at some point during the course of that day. The Plaintiff contended that as a result of this expiry, all of the subsequent extensions were null and void and that no valid Cease Trade Order was in place at the time of the breaches for which he had been charged.

[15] Bigelow J. raised a concern about these submissions when the hearing convened on March 26, 2012. Specifically, he indicated that the material provided by the Plaintiff raised potential defenses to the charges to which the Plaintiff was pleading guilty. Mr. Watson expressed a similar concern, and indicated to the court that he was not prepared to take a guilty plea from a person who professes his innocence. As a result, Bigelow J. suggested that the guilty plea be struck and that the trial be rescheduled with a new trial judge on an expedited basis.

[16] The Plaintiff’s response was to indicate to the judge that he was still open to being persuaded that the Cease Trade Order was valid and in force, and that if he could be so persuaded he was still willing to enter a guilty plea. The transcript shows that Mr. Watson then indicated that he would try to explain to the Plaintiff why his view of the Cease Trade Order’s expiry was incorrect.

[17] At that point, Bigelow J. indicated that he would hold the matter down to permit the parties to discuss it among themselves. Bigelow J. stated on the record that he would require a “clear indication” from the Plaintiff that he truly intended to plead guilty and that he accepted a state of facts on which a guilty verdict could be entered, and that without such clarity from the Plaintiff the matter would have to proceed to trial.

[18] The hearing then the adjourned. What happened next is best described by K. Campbell J. in R v Schwartz, 2013 ONSC 5031, at paras 10-13, which is the judgment on appeal of the guilty verdict that was eventually entered against the Plaintiff:

4. Confirming Guilt and Admitting Supporting Factual Basis for the Guilty Pleas 10 The matter was then held down for several hours to permit the parties to meet and further discuss these issues. When the parties returned in the afternoon, the Prosecutor explained that they had engaged in a ‘very frank discussion’ and that the appellant was now prepared to ‘continue with the matter.’ The Prosecutor also indicated that the appellant had been advised that, if he was to continue with the guilty pleas, ‘he has to accept the facts and acknowledge his guilt,’ and plead guilty ‘for the proper reasons’ and not just to get the matter over with expeditiously…

11 …Thereafter, in response to a series of questions posed by Bigelow J., the appellant confirmed all of the following:

• That he was ‘not resiling at all’ from the agreed statement of facts that he had personally signed along with the Prosecutor.
• That he was prepared to concede that he was subject to the alleged ‘cease trade order’ during the time period covered in the information.
• That he agreed to have his initials placed upon the share certificates being sold, and that this constituted an act in furtherance of a trade in securities.

5. The Sentencing Proceedings

12 Once the appellant expressly made all of these concessions, Bigelow J. indicated that it appeared that the appellant had ‘admitted the essential elements of the offences,’ and that it was, therefore, appropriate to maintain the ‘findings of guilty’ that had been entered on the earlier occasion…

13 On March 27, 2012, the appellant came to court with a revised version of his written sentencing submissions. By way of explanation, the appellant indicated that he ‘obviously’ had to ‘modify’ his submissions so as to make it ‘abundantly clear’ that he was ‘guilty as charged’ and that he was ‘pleading guilty.’

[19] At the sentencing hearing, the prosecutor asked for 12 to 15 month sentence, while the Plaintiff requested a conditional discharge. Bigelow J. sentenced the Plaintiff to 90 days internment.

[20] The Plaintiff’s subsequent appeal to the Superior Court of Justice against both the conviction and the sentence were dismissed. Campbell J. held, at para 18 of his judgment, that the Plaintiff’s guilty plea was “unequivocal, voluntary and informed”, and that, at para 25, the Plaintiff “was sufficiently informed about the consequences of his pleas of guilty to ensure their legal validity.” He further found, at para 29, that the Plaintiff “offered no persuasive reason which might justify appellate interference with the sentence imposed by Bigelow J.”

[21] On a parallel track, on March 22, 2010 the OSC commenced another proceeding against the Plaintiff under section 127 of the Securities Act. This time the allegation was that the Plaintiff had traded in securities of York Rio Resources Inc. (“York Rio”) contrary to the Cease Trade Order first issued on May 1, 2006 and continued numerous times thereafter.

[22] The York Rio proceeding was heard by an OSC panel commencing on March 21, 2011. It took 33 non-consecutive hearing days to complete. During the course of the York Rio hearing, the Plaintiff raised precisely the same challenge to the Cease Trade Order of May 1, 2006 that he pleads as the basis of his claim herein – i.e. that the Cease Trade Order expired on June 9, 2006 without being validly extended, thereby making it null and void and inapplicable to any securities trades made by him after that date.

[23] This claim was specifically adjudicated, and rejected, by the OSC panel, which found the Plaintiff had breached the Cease Trade Order by trading in York Rio securities. On March 25, 2013, the OSC panel released its reasons for judgment in In the Matter of York Rio Resources Inc., http://www.osc.gov.on.ca/documents/en/Proceedings-RAD/rad_20130325_yorkrio.pdf. At paragraph 555-556 of those reasons, the OSC stated:

[555] We note that the May 11, 2006 order did not say that the order was continued ‘until June 9, 2006, at 10:00 a.m.’ or ‘until the start of the June 9, 2006 hearing’ but ‘until the June 9, 2006 hearing or until further order of the Commission.’ In our view, the May 11, 2006 order was intended to remain in place until the Commission made a further order at the conclusion of the hearing on June 9, 2006, which the Commission did.

[556] We find that Schwartz engaged in numerous acts in furtherance of trades in York Rio securities, contrary to the Euston Order, during and after the Undisputed Period…

[24] To summarize, the validity of the May 1, 2006 Cease Trade Order was reconfirmed by its consensual renewal on May 11, June 9 and October 19, 2006. It was further upheld after a contested hearing regarding its renewal on December 4, 2006. The same Cease Trade Order initially issued on May 1, 2006 was admitted to have been breached and was the basis for a guilty plea and criminal conviction in the Ontario Court of Justice on March 26, 2012. This conviction was upheld on appeal on June 12, 2013 in further confirmation of the validity of the Cease Trade Order. In addition to all of that, the validity of the Cease Trade Order was challenged in the York Rio proceedings on the basis of the identical argument found in the within Fresh as Amended Statement of Claim, and that challenge was dismissed on its merits by a duly constituted panel of the OSC on March 25, 2013, which found the Cease Trade Order to be valid and enforceable.

[25] Subsequent to the hearing of this motion, I was advised by counsel for the OSC that the Plaintiff’s motion for leave to appeal the judgment of Campbell J., which had upheld the Plaintiff’s criminal conviction for breach of the Cease Trade Order, has been dismissed. The endorsement of Rouleau J.A. to this effect was issued on November 8, 2013, Court of Appeal File No. M42796.

[26] The Plaintiff has written to me to take issue with OSC’s counsel advising me of the Court of Appeal’s dismissal of the motion for leave. He has indicated that in his view this correspondence from OSC’s counsel was an improper communication with me.

[27] I do not agree with the Plaintiff’s view. OSC’s counsel wrote me a short note, without advocacy or editorial comment and with copies properly to the Plaintiff and to counsel for the other Defendants, enclosing the endorsement of the Court of Appeal. That was nothing more than an appropriate update of a case in the record. I would have been surprised if none of the parties had thought to send it to me once it was issued.

II. Issue Estoppel and Abuse of Process

[28] In the Supreme Court of Canada’s recent decision in Behn v Moulton Contracting Ltd., 2013 SCC 26, at para 40, LeBel J., for a unanimous court, quoted approvingly from the dissent of Goudge J.A. in Canam Enterprises Inc. v Coles (2000), 2000 8514 (ON CA), 51 OR (3d) 481, at para 56 (Ont CA), where it was stated that, “[o]ne circumstance in which abuse of process has been applied is where the litigation before the court is found to be in essence an attempt to relitigate a claim which the court has already determined.” That single sentence effectively summarizes the Defendants’ submissions here.

[29] In order to ensure that litigation will have finality, the Supreme Court has elsewhere made it clear that “a party is expected to raise all appropriate issues and is not permitted multiple opportunities to obtain a favourable judicial determination.” Penner v Niagara Regional Police Services Board, 2013 SCC 19, at para 42. Likewise, the Judicial Committee of the Privy Council has stated that “[i]t is in the public interest that there should be finality to litigation and that no person should be subjected to action at the instance of the same individual more than once in relation to the same issue.” Thomas v. Trinidad & Tobago (Attorney General) (1990), 115 NR 313, at 316.

[30] In a description that is particularly apt to the Plaintiff’s approach to this litigation, the House of Lords commented in Hoystead v. Commissioner of Taxation, 1925 607 (UK JCPC), [1926] AC 155, at 165, that:

Parties are not permitted to begin fresh litigations because of new versions which they present as to what should be a proper apprehension by the court of the legal result either of the construction of the documents or the weight to certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted.

[31] As indicated, the Plaintiff’s claim that the Cease Trading Order expired at the commencement of the hearing on June 9, 2006, or at some point during that day, has been visited and revisited. The issue was relevant over the course of the Cease Trading Order’s several extensions, in the criminal proceedings before Bigelow J. and appeal thereof before Campbell J., and leave application before Rouleau J.A., at the Uranium308 regulatory hearing before an OSC panel, and, finally, at the York Rio regulatory hearing. If the court does not impose some finality, there is a chance that the Plaintiff’s “legal ingenuity”, as that phrase is used by the House of Lords in Hoystead, may never exhaust itself.

[32] The within claim is not, of course, estopped because its stated causes of action have been previously adjudicated – the actual causes of action pleaded in this civil claim are different from those in the prior regulatory and criminal cases against the Plaintiff. However, the principle of res judicata applies not just to cause of action estoppel but to issue estoppel. This is relevant “where, the subject matter of the two actions being the same, it is sought to raise in the second action matters of fact or law directly related to the subject matter which could have been but were not raised in the first action.” Chevron Canada Resources Ltd. v R., (1998) 1998 9090 (FCA), 232 NR 44, at para 36 (Fed CA).

[33] The constituent elements of issue estoppel were set out by the Supreme Court of Canada in Angle v Minister of National Revenue, 1974 168 (SCC), [1975] 2 SCR 248: a) the same parties or their agents were involved in the subsequent as the prior decision; b) the decision in the prior proceeding was a judicial and final one; and c) the same issue was decided in the prior decision. In the present case there are several prior decisions, each of which seems to qualify in terms of the constituent elements of issue estoppel.

[34] The criminal proceedings against the Plaintiff in the Ontario Court of Justice, and the appeal thereof to the Superior Court of Justice and leave application to the Court of Appeal were, of course, were judicial and final. Likewise, the various proceedings before OSC panels were final decisions and, although regulatory in nature, were “judicial” in that their procedures conformed with natural justice. The Court of Appeal in Rasanen v Rosemount Instruments Ltd. (1994), 1994 608 (ON CA), 17 OR (3d) 267 confirmed that this is the sense of “judicial” that is required for issue estoppel to apply.

[35] In its judgment in Danyluk v Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 SCR 460, the Supreme Court engaged in a thorough analysis of issue estoppel. The Court indicated that issue estoppel is a discretionary doctrine that should be applied in consideration of a number of factors: the wording of the statute under which the prior proceeding was brought, the purpose of that statute, the availability of an appeal of the prior decision, the procedural safeguards in the prior proceeding, the expertise of the prior decision-maker, the particular circumstances giving rise to the prior proceeding, and whether the application of issue estoppel would deprive a person of the right to be heard and thereby work an injustice.

[36] To put the matter another way, “a plaintiff may not simply ignore an unfavourable result in an administrative proceeding but must demonstrate why, as a matter of discretion, the decision should not be given effect in a subsequent civil action.” Sean C. Doyle, “The Discretionary Aspect of Issue Estoppel: What Does Danyluk Add” (2002), 9 Canadian Lab. & Emp. L.J. 295, at 309.

[37] The present case meets all of the tests posed in Danyluk for the exercise of discretion. Insofar as the prior decisions were a result of OSC regulatory proceedings, there is no principled reason for the doctrine of issue estoppel not to apply. The wording and purpose of the Securities Act indicate that proceedings thereunder are meant to be a complete package for adjudicating the investor protection/public interest mandate advanced by the Cease Trade Order at issue in the claim. See Committee for Equal Treatment of Asbestos Minority Shareholders v Ontario Securities Commission, [2000] 2 SCR 132, at para 41. As already indicated, the Plaintiff had an opportunity to appear at all of the prior regulatory hearings and to raise the matters contained in his pleading herein. He also had an opportunity to appeal those regulatory decisions, and declined to do so.

[38] In the prior criminal prosecution, the Plaintiff likewise had an opportunity to appear before the trial judge, to plead guilty and to thoroughly reconsider his plea, and then to appeal the decision of first instance. His plea was ultimately accepted and his appeal was ultimately lost.

[39] This is not a case where the civil action was prior to the criminal prosecution, and where the application of issue estoppel could potentially raise problems with respect to the presumption of innocence in the criminal proceeding. Duhamel v The Queen, 1984 126 (SCC), [1984] 2 SCR 555, at 562. Rather, this is a case where the prior proceeding is itself either a criminal case, with its heavy burden of proof, or a regulatory case, with a burden of proof comparable to the present civil case. As such, there is no impediment to the application of issue estoppel. R v Mahalingan, 2008 SCC 63, [2008] 3 SCR 316, at paras 367-368.

[40] The OSC and the criminal courts both qualify as tribunals with expertise in their fields. See R v Consolidated Maybrun Mines Ltd., 1998 820 (SCC), [1998] 1 SCR 706, at para 62. Moreover, there is nothing in the personal circumstances of the Plaintiff to indicate that he was unable to present his case in those prior proceedings. Indeed, the opposite appears to be the case.

[41] The Plaintiff has been afforded multiple opportunities, at times represented by counsel and at other times representing himself, to make his case. In bringing the claim herein, he is “attempting to challenge the validity of a binding order in the wrong forum, in the sense that the validity of the order comes into question in separate proceedings when that party has not used the direct attack procedures that were open to it (i.e. appeal or judicial review).” Garland v Consumers Gas Co., 2004 SCC 25, [2004] 1 SCR 629, at para 71. More than that, to the extent that the Plaintiff has in fact used the “direct attack procedures” that were open to him – i.e. the appeal of his criminal conviction – his appeal has been dismissed.

[42] There is nothing in the record to suggest that putting an end to the Plaintiff’s case here will work an injustice. The Plaintiff’s claim represents a stark case of precisely what the doctrine of issue estoppel is designed to prohibit. For over a century, courts have stressed that they “will not…permit the same parties to open the same subject of litigation in respect of matters which might have been brought forward as part of the subject in contest…”, especially where “the [prior] decree concluded the whole matter, that [the present court] could not rehear that decree, and that it was final and conclusive, unless reversed by…the proper appellate tribunal. Henderson v Henderson (1843), 67 ER 313, at 319, 318 (Ch D).

[43] The only question that gives me pause, albeit very briefly, is whether the parties to the present claim are sufficiently identical to those in the prior proceeding. As indicated in Angle, supra, identity of parties is one of the constituent elements of issue estoppel. The Plaintiff, of course, was a party to all of the prior proceedings. The other party to the several regulatory proceedings brought against him was the OSC, while the other party to the criminal proceedings brought against him was Her Majesty.

[44] The OSC typically provides a lawyer to handle the prosecution where criminal charges are brought for violation of the Securities Act, and that was the case here – Campbell J.’s description of the proceedings in the Ontario Court of Justice makes that amply clear [at para 5]: “Following the arraignment and plea, the agreed statement of facts that had already been signed personally by the appellant and by counsel for the Ontario Securities Commission (OSC) was entered as an exhibit.” While the OSC may not be a formal party to the criminal proceedings, it is probably correct to say, as the Plaintiff himself says at para 15 of his factum, that the OSC acts in those proceedings as “an agent of the Crown.”

[45] The Defendants in the within action include the OSC, the Crown and the Attorney General of Ontario, as well as a number of individual employees of the OSC and its Chair. There is therefore an overlapping set of parties to the various proceedings, but they are not identical in every respect. Formally, no issue has been determined as between the Plaintiff and the individual Defendants in any of the prior proceedings. Likewise, one could argue that, strictly speaking, the holdings in the prior regulatory proceedings were between the Plaintiff and the OSC whereas the holding in the criminal prosecution was between the Plaintiff and the Crown.

[46] Against this, one could argue that the OSC, as agent for the Crown, is interchangeable with Her Majesty in Right of Ontario, who is in turn interchangeable with the Attorney General of Ontario, as a party to the criminal prosecution. One could also argue that the individual Defendants herein are sued only in their capacities as agents and employees of the OSC, and that they are equally interchangeable with their employer as parties. Indeed, one could point out that section 141 of the Securities Act provides that, absent bad faith, these individual Defendants acting as agents and employees of the OSC, are immune from suit altogether.

[47] As a formal matter there appears to be an almost-but-not-quite-perfect mirroring of the parties to the prior regulatory/criminal proceedings and the present proceeding. Blair J.A. pointed out in Re EnderNorth Industries Inc., 2009 ONCA 536, [2009] OJ No 2815 (Ont CA) that directors, officers, and, in certain circumstances, even creditors have sufficient identity of interest with a corporate party that they are its “privies”. As far back as Re Ontario Sugar Co., [1911] OJ No 76, the Ontario Court of Appeal held that a prior judgment on the same issue is “binding and conclusive between the parties and their privies.” In this context, “[p]rivity requires parallel interests in the merits of the proceeding, not simply a financial interest in the result.” Glenko Enterprises Ltd. v. Keller, [2008] MJ No 65, at para 42 (Man CA).

[48] This language has remained until modern times an integral part of the way that courts have explained issue estoppel. The Court of Appeal indicated in Bear Island Foundation v Ontario (1999), 1999 9307 (ON CA), 126 OAC 385, at para 29, that issue estoppel “means that any action or issue that has been litigated and decided cannot be retried in a subsequent lawsuit between the same parties or their privies.” [emphasis added] As the Manitoba Court of Appeal explained it in Glenko, supra, at para 42, a person is for these purposes a privy of a party – i.e. adequately identified with a party – where, as among the Defendants here, there is a “community or privity of interest between them, or a unity of interest between them.”

[49] The Plaintiff’s claim is directed against the OSC, the Crown, the Attorney General, the chair of the OSC, and the lawyers and investigators who worked for the OSC, all on an interchangeable basis. His entire point is summarized at para 4 of his factum, where he states:

The Defendants engaged in various torts in the course of prosecuting me for breaching the Order which, by its plain wording, expired at the beginning of the hearing meant for its extension or it expired following the hearing, as announced by the Commission. [emphasis in the original]

[50] The question of whether or not the Cease Trade Order initially issued on May 1, 2006, and continued on May 11, 2006, expired on June 9, 2006, is the same whether it is determined as against the Crown, the Attorney General, the OSC, or any OSC personnel. They are all implicated together in this question, and this identity of interest makes them each other’s privies.

[51] Like the prior criminal proceedings, the prior regulatory proceedings brought against the Plaintiff by the OSC are barred through issue estoppel from being relitigated as against the OSC and the individual Defendants as well as against the Attorney General and Crown. Like the prior regulatory proceedings, the prior criminal proceedings brought against the Plaintiff by the Crown are barred through issue estoppel from being relitigated as against the Crown and Attorney General as well as against the OSC and the individual Defendants.

[52] Even if the doctrine of issue estoppel were not to apply because of concerns about the identity of the parties to the series of proceedings, the present claim would amount to an abuse of process. As the Supreme Court stated in Toronto (City) v Canadian Union of Public Employees, Local 79, 2003 SCC 63, [2003] 3 SCR 77, at para 38-39 that, “the doctrine of abuse of process has been extended beyond the strict parameters of res judicata while borrowing much of its rationales…” Arbour J. indicated that those rationales include: “that there be an end to litigation and that no one should be twice vexed by the same cause”. CUPE, Local 79, ibid., citing Donald J. Lange, The Doctrine of Res Judicata in Canada (Markham, ON: Butterworths, 2000), at 347.

[53] Depending on how one counts up the prior proceedings here, the Defendants (taken as a group) have been vexed at least four times by the same cause. There certainly needs to be an end to the litigation over the question of whether the Plaintiff breached a Cease Trade Order that was at the time valid and in force. He did and it was.

[54] The OSC panel came to precisely this conclusion in In the Matter of York Rio Resources Inc., supra, at para 553:

We do not accept Schwartz’s interpretation of the temporary order provisions of the [Securities] Act.

and at para 556:

Nor do we accept Schwartz’s submission that any change in the Commission's general approach to temporary orders practice reflects a view that a temporary order expires at 12:01 a.m. on the day of the hearing, or that it expires at the start of any temporary order hearing.

[55] Successive OSC panels and the courts have already concluded that the Plaintiff’s entire claim is built on an incorrect view of the Cease Trade Order of May 1, 2006, as continued. That issue cannot be relitigated in the guise of the present action; to do so would be an abuse of process.

[56] Separate from the res judicata argument, the Defendants submit that the entire claim is, in effect, a veiled malicious prosecution claim. Having concluded that the present action is barred by operation of issue estoppel and/or abuse of process, there is no need to review this argument in detail.

[57] I will observe, however, that the gist of the present claim is that the Plaintiff was misled, or his complaints ignored, by the Crown, the OSC, and prosecutors in the prior proceedings. That is just what one would allege if this action were to sound in malicious prosecution; however, since malicious prosecution can only be a cause of action where a plaintiff was acquitted in the prior proceedings, and here the Plaintiff was either found liable or pleaded guilty in those proceedings, malicious prosecution would not fit the facts. The causes of action that are actually pleaded here appear to have been manufactured by the Plaintiff as attempts to raise a malicious prosecution claim indirectly where it cannot be pleaded directly.

III. Disposition

[58] The action is dismissed, with prejudice.

[59] The parties may make written submissions on costs. I would ask that these be sent to me within two weeks of the date of this judgment.

Morgan J.

Date: November 22, 2013