Court File and Parties

COURT FILE NO.: CV-12-465180

DATE: 20131127

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Virginia Melnyk

AND:

Toronto Community Housing Corporation, the Metropolitan Toronto Housing Company Ltd, and Intact Insurance Company

BEFORE: Carole J Brown J

COUNSEL: Virginia Melnyk representing herself

Christina Henderin, for the Defendants Toronto Community Housing Corporation and the Metropolitan Toronto Housing Company Limited

HEARD: November 19, 2013

ENDORSEMENT

[1] The moving party defendant, Toronto Community Housing Corporation ("Toronto Community Housing" or "the moving party") brings this motion to (i) set aside the noting in default of the moving party by the plaintiff, Virginia Melnyk ("Ms. Melnyk" or "the plaintiff"); (ii) strike Ms. Melnyk's claim in its entirety without leave to amend or refile and to dismiss Ms. Melnyk's claim on the basis that it is frivolous, vexatious and an abuse of process pursuant to Rules 21.01(3)(d) and 25.11 of the Rules of Civil Procedure ("the Rules"); and (iii) declare Ms. Melnyk a vexatious litigant pursuant to section 140 of the Courts of Justice Act. It also seeks to have the action struck as again the Metropolitan Toronto Housing Company Ltd, which no longer exists as a legal entity.

[2] Toronto Community Housing is the largest social housing landlord in Canada, and the second largest in North American. It provides some market rent accommodation, but the majority of its housing rental units are occupied by low to moderate income residents. Ms. Melnyk was a residential tenant from August 1, 1995 to June 3, 2013.

[3] Its predecessor, the Metropolitan Toronto Housing Authority became the Metro Toronto Housing Corporation by Articles of Incorporation dated December 14, 2000 and thereafter, became Toronto Community Housing Corporation by Articles of Amendment dated October 9, 2001. As such, Metropolitan Toronto Housing Company Ltd., which is no longer a legal entity, and was not a legal entity at the material time, should not have been added as a party defendant.

[4] The defendant, Intact Insurance Company, provides, auto and business insurance. There is no evidence before this Court as to the particulars, terms or conditions of Ms. Melnyk's insurance policy with Intact. Intact appeared at this motion and advised the Court that a motion to set aside the noting in default as against it is to be heard by the Master on December 4, 2013.

[5] The plaintiff filed no responding material in this motion, but provided to the Court and to Ms. Henderin documents which she wished to refer to involving alleged identity theft and fraud as regards a variety of claims, which are not related to her statement of claim in this action. She appeared at the motion using an augmented hearing device.

The Facts

[6] The plaintiff commenced this action by Notice of Action on October 9, 2012, in which she claimed $100,000 in damages against the defendant concerning an alleged flood and conversion of personal property which occurred in her rental unit. On April 8, 2013, the plaintiff served her Statement of Claim for damages in the amount of $160,000, claiming that a flood and theft occurred in the unit and that her personal property, consisting of designer clothing, art/pictures, jewelry and personal belongings, was stolen and converted.

[7] Pursuant to her claim, the plaintiff alleges that on or about October 10, 2010, she left her premises to shop at a Walmart store in Thornhill Ontario and, while driving there, noticed two automobiles following her, which were not police cars. Upon returning to her apartment, she found the "storage room flooded, most of her expensive clothes bagged into white garbage bags, and thrown into the bathtub, soaked in acid water. She further found that the lights, chandeliers and numerous items/goods were damaged by the flood. She alleges that just prior to this, she had brought to her apartment many expensive items that were stored with a storage company. They were all washed and cleaned and ready to go to their destination, but were instead, stolen. She alleged that she had just packed all of her expensive, brand-new designer clothes into new containers as she was planning to move. She alleged that the manager of the building had removed and stolen her possessions.

[8] On April 17, 2013, the defendant served its Notice of Intent to defend in accordance with the Rules of Civil Procedure ("the Rules") and advised the plaintiff by letter that the defendant intended to bring a motion to strike the statement of claim pursuant to Rules 21 and 25. The defendant requested the plaintiff's availability for the month of July so that a motion could be booked and indicated that it would not serve and file its Statement of Defence in the interim. The defendant requested that Ms. Melnyk not note the defendant in default given the circumstances. On July 11, 2013, the plaintiff advised the defendant that she would require an additional 30 days to retain a lawyer. The defendant agreed to provide said extension. On July 23, 2013, the defendant learned that the plaintiff had, without notice, noted the defendant in default, and advised the plaintiff by letter of July 23, 2013 that it would be moving to set aside the noting in default in the event that she did not consent to setting aside the noting in default. She refused to consent.

[9] On August 14, 2013, the defendant advised that the motion to set aside the noting in default and to strike the claim was scheduled for November 19, 2013.

[10] Throughout the plaintiff's tenancy with the defendant, she had initiated several proceedings against the defendant at the Landlord and Tenant Board, Small Claims Court and Superior Court of Justice. These included an allegation pursuant to section 82 of the Residential Tenancies Act, in response to the defendant's application to terminate her tenancy for non-payment of rent, that her apartment had been broken into and theft and conversion of property had occurred. Based on the transcripts and decision before me, the factual matrix raised by Ms. Melnyk was substantially similar to the within claim. Ms. Melnyk's application pursuant to section 82 was dismissed, after a full hearing, by Member Mervin of the Landlord and Tenant Board hearing on the ground that Ms. Melnyk did not have any reliable evidence at the hearing. Pursuant to the Order of the Board dated February 10, 2012, Ms. Melnyk's tenancy was terminated and she was ordered to pay outstanding arrears owed to the defendant. The decision was thereafter reviewed at the instance of Ms. Melnyk by the Landlord and Tenant Board and the decision of the Board was upheld on December 20, 2012. The decision was thereafter reviewed again due to the fact that Ms. Melnyk indicated that she had not been served with respect to the first review. The second review also upheld the decision of Member Mervin on August 15, 2012.

[11] Ms. Melnyk thereafter brought an action in Small Claims Court on June 10, 2010 claiming $25,000 for illegal entry into her unit which occurred on or about August 12, 2009 in which she also alleged that the defendant had "pulled another stunt similar to this one in about October of 2010, which I am currently having investigated by the police". This action was dismissed on September 20, 2011 on the ground that it had been brought in the wrong jurisdiction.

[12] Thereafter, the plaintiff appealed the Landlord and Tenant Board decision and Reviews to the Divisional Court, which was dismissed for delay pursuant to the Order of the Assistant Registrar of the Divisional Court, as Ms. Melnyk had failed to perfect her appeal. She appealed this decision and Sachs J granted the plaintiff an extension of 30 days in which to perfect her appeal, failing which the appeal would be dismissed pursuant to the Order of the Assistant Registrar. The plaintiff failed to pursue her appeal and the decision of the Board was upheld.

[13] Finally, this action was commenced in the Superior Court of Justice on October 9, 2012, again alleging that the defendant had illegally entered her unit on or about October 10, 2010 and had stolen or converted her personal property, had flooded and caused damage to her apartment.

The Positions of the Parties

[14] It is the position of the defendant that the matters before the Court are properly within the jurisdiction of the Landlord and Tenant Board and referred me to sections 29 (1), 30 and 210 and section 21.2 of the Residential Tenancies Act. The defendant argues that the Statement of Claim is a collateral attack on the Board’s jurisdiction and is, as such, an abuse of the court’s process. They argue that, accordingly, the plaintiff's claim should be struck in its entirety.

[15] The defendant further submits that it would be an abuse of process for the plaintiff to re-litigate the same issues that were considered and decided by the Board as regards the alleged illegal entry and conversion of property. The Board, at a hearing, determined that there was no merit to the plaintiff's arguments which were not supported by any credible evidence and dismissed the allegations and ordered no rent abatement.

[16] The plaintiff argues that during the time she was a tenant in Toronto Community Housing, people were constantly entering her apartment when she was not there and stealing her possessions, destroying her property and eating her food. She submitted that five cameras had been installed in her apartment, including two installed by Toronto Community Housing, two by the police and one by the insurer. She further indicated that there were sensors on her door to alert others when she left her apartment. She seeks damages for all of her designer clothing and other valuable possessions stolen. She further claims that there was identity theft and fraud, although these allegations do not form part of her statement of claim.

The Law and Analysis

Rule 19.03(1) Setting Aside the Noting In Default

[17] Pursuant to Rule 19.03, a noting in default may be set aside by the court on such terms as are just. Noting in default may be set aside where the defendant is able to establish a continuing intention to defend the claim, a valid explanation for the delay in defending the action, whether the motion was brought with reasonable dispatch and whether any prejudice would result to the party relying on the noting in default.

[18] Based on all of the evidence before me and the submissions of the parties, I am satisfied that the defendant always had an intention to defend and, indeed, had served its Notice of Intent to Defend with a cover letter explaining that it was scheduling a motion to strike the Statement of Claim and requesting that the plaintiff not note them in default. Further, I am satisfied that the failure to serve and file a statement of defense within the timeline required by the Rules was satisfactorily explained and that this motion was brought with reasonable dispatch. I do not find there to be any prejudice on the part of the plaintiff. In all the circumstances, the noting in default is set aside.

Rule 21: Striking The Statement of Claim for Abuse of Process

[19] Pursuant to Rule 21.01(3)(d), a defendant may move before a judge to have an action dismissed on the ground that it is frivolous or vexatious or is otherwise an abuse of the process of the court. Pursuant to Rules 25.11(b) and 25.11(c), the court may strike out or expunge all or part of a pleading, with or without leave to amend on the ground that it is scandalous, frivolous, vexatious or an abuse of process of the court. Canadian courts have applied the doctrine of abuse of process to preclude re-litigation in circumstances where the strict requirements of issue estoppel are not met, that allowing the litigation to proceed would nonetheless violate such principles as judicial economy, consistency, finality and the integrity of the administration of justice. As stated by Ground J. in Reddy (Litigation Guardian of) v Oshawa Flying Club (1992) 30 4ACWS (3d) 503, paragraph 26,

The court has an inherent jurisdiction to dismiss or stay any proceedings which it determines to be an abuse of process. The doctrine of abuse of process is somewhat similar to the doctrine of res judicata, in that it also seeks to prevent a multiplicity of proceedings or the re-litigation of an issue determined in earlier proceedings or which might have been raised in earlier proceedings but the party now raising the issue before the court chose not to do so.

See also Green v 356 Walmer Road Construction Company 1998 14713 (ON SC), [1998] O. J. No. 6470 at paragraphs 42-43.

[20] There is a degree of overlap in the meaning of the terms frivolous, vexatious and an abuse of process. An action for which there is clearly no merit may qualify for classification as frivolous, vexatious or an abuse of process, as may cases in which the plaintiff seeks to re-litigate a cause. The definition of a frivolous action is "one which, on its face, is so unreal that no reasonable or sensible person could bring it". Similarly, a frivolous and vexatious pleading is one which is "hopeless factually", where it is "plain and obvious… [it] cannot succeed.

[21] In this case, the defendant argues that the present action is essentially a re-litigation of the same issues dealt with and dismissed in the section 82 application brought by the plaintiff at the Landlord and Tenant Board hearing of the landlord application seeking to terminate Ms. Melnyk's tenancy for non-payment of rent. The defendant submits that the decision of the Board was reviewed and upheld on two occasions, was appealed to the Divisional Court, which appeal was dismissed for failure to perfect the appeal. Further, the defendant argues that the issues and claims in the present action are the same as those alleged in the plaintiff's Small Claims Court action. All allegations involve the alleged illegal entry by staff of the Toronto Community Housing into her rental unit, theft or conversion of personal property and designer clothing, and damage to her property.

[22] Based on all of the foregoing, it is clear that the plaintiff has made the same allegations as against the defendant in a variety of actions which have been dismissed.

[23] I am satisfied that the allegations in the present claim are the same as and are a re-litigation of allegations raised at the Landlord and Tenant Board hearing which were reviewed on two occasions, and upheld and the same issues as raised in the Small Claims Court action. I find that the action brought by Ms. Melnyk is vexatious, an abuse of the process of this Court and should not be permitted to proceed.

[24] Accordingly, I order that the statement of claim in Court file number CV-12-465180 be struck without leave to amend.

Courts of Justice Act, Section 140

[25] Section 140 of the Courts of Justice Act provides:

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 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.

[26] Where an individual has instituted proceedings which are frivolous and/or vexatious, a Judge of the Superior Court may issue an order that requires that person to seek the leave of the Superior Court in order to commence or continue any proceedings before any court.

[27] Section 140 engages the court's inherent jurisdiction to control its process and to prevent abuse of its process.

[28] An order under section 140 is beneficial to all parties as it ensures that public resources are not wasted on vexatious litigation, protects the targets of vexatious litigation from the time and cost of mounting a defence, and also serves the litigant who is attempting to proceed with vexatious litigation by averting what would inevitably be a costly, time-consuming and futile effort: Law Society of Upper Canada v Chavali, [1998] O. J. No. 5890 (Gen. Div.).

[29] The section 140 order does not prevent access to the courts, but rather requires that applications for leave to the court be granted before a plausible claim can proceed, while vexatious proceedings will be thwarted: Law Society of Upper Canada v Chavali, supra.

[30] In determining whether a section 140 order should issue, the following factors are relevant:

(a) whether the action or actions were brought to determine an issue or issues which have already been determined by a court of competent jurisdiction;

(b) whether the grounds and issues raised in the proceedings are rolled forward into subsequent actions, repeated and supplemented;

(c) whether it is obvious that an action is not capable of success or that no reasonable person can reasonably expect to obtain relief;

(d) whether the actions are brought for any improper purpose, including harassment or oppression of other parties by proceedings brought for purposes other than the assertion of legitimate rights.

See: Re Lang Michener v Fabian, 1987 172 (ON SC), [1987] O. J. No. 355 (H. C. J.)

[31] In determining whether proceedings are vexatious, the whole history of the matter must be considered, and not just whether there was originally a good cause of action. Whether a proceeding is vexatious is determined by an objective standard.

[32] Based on the submissions of counsel and Ms. Melnyk, the evidence before me, and the jurisprudence, and having reviewed the pleadings in this action, the Landlord and Tenant Board transcript and decision, and the Small Claims Court pleadings, I am satisfied that Ms. Melnyk has raised issues that had previously been raised and considered by courts of competent jurisdiction and is now attempting to re-litigate these issues in new proceedings. I am satisfied, based on all of the evidence, that an order should issue pursuant to section 140 the Courts of Justice Act declaring that Ms. Melnyk has instituted vexatious proceedings, and prohibiting her from directly or indirectly instituting any further proceedings in any court in Ontario against the defendant, Toronto Community Housing Corporation, without leave of the court to do so. I emphasized that this Order does not preclude Ms. Melnyk from bringing any more actions, but only requires that she seek the leave of the Court to bring any further action which she wishes to commence against the defendant, Toronto Community Housing.

Analysis

[33] Based on all of the evidence before me, I am of the view that the action constitutes an abuse of process, and that the plaintiff is a vexatious litigant within the meaning of section 140 of the Courts of Justice Act and should be prevented from commencing further claims as against the Toronto Community Housing Corporation pursuant to section 140 of the Courts of Justice Act, without the leave of the Court.

Orders

[34] The Court orders that:

1. The plaintiffs Statement of Claim in this action, No. CV-12-465180, is struck without leave to amend;

2. The plaintiff is declared a vexatious litigant pursuant to section 140 of the Courts of Justice Act and is prevented from commencing any further actions in any court as against the Toronto Community Housing Corporation without the leave of the Court;

3. The plaintiff is to pay all outstanding rent and costs payable to the Toronto Community Housing Corporation, as ordered by all previous Boards and Courts.

Costs

[35] I would urge the parties to agree upon costs, failing which I would invite the parties to provide any costs submissions in writing, to be limited to three pages, including the costs outline. The submissions may be forwarded to my attention, through Judges’ Administration at 361 University Avenue, within thirty days of the release of this Endorsement.

Carole J. Brown J.

Date: November 27, 2013