Court File and Parties

COURT FILE NO.: 19-79550 DATE: 2019/06/20 SUPERIOR COURT OF JUSTICE – ONTARIO

APPLICATION UNDER section 140 of the Courts of Justice Act, RSO 1990, c. C.43

RE: Blue Heron Co-Operative Home Inc., Michelle Bainbridge, Co-Operative Housing Federation of Canada and Co-Operative housing Association of Eastern Ontario – Applicants/Respondents by Counter Application) v. Stephen O’Brien – Respondent/Applicant by Counter Application

BEFORE: Mr. Justice Martin S. James

COUNSEL: Joseph Jebreen, for the Applicants Blue Heron Co-Operative Homes Inc. and Michelle Bainbridge Neil Milton, for the Applicants Co-Operative Housing Federation of Canada and Co-Operative Housing Association of Eastern Ontario Stephen O’Brien, Self-Represented

HEARD: June 18, 2019

ENDORSEMENT

Introduction

[1] This is a vexatious litigant application brought by the applicants against Stephen O’Brien.

[2] The applicants are composed of two groups: Group one is composed of the Blue Heron Co-Operative Homes Inc. (the “Co-Op”) and Michelle Bainbridge, an employee of the Co-Operative. Group 2 is composed of the Co-Operative Housing Federation of Canada and the Co-Operative Housing Association of Eastern Ontario.

[3] In addition, Mr. O’Brien has brought what he refers to as a counter application wherein he requests that the applicants’ application be dismissed as an abuse of process and because it is frivolous and vexatious. He also seeks an order preventing the Co-Op and Ms. Bainbridge from commencing proceedings against him without leave subject to allowing certain existing proceedings to go forward.

[4] For the reasons that follow, I have determined that the application ought to be granted.

The Facts

[5] Mr. O’Brien is a long-time resident of the Blue Heron Co-Operative. About 70% of the Co-Op’s 83 units are occupied by residents who have subsidized rent. Mr. O’Brien is a recipient of ODSP.

[6] According to the applicants, this saga began in 2012 with a complaint by Mr. O’Brien to the Financial Services Commission of Ontario (FSCO) respecting the operation and management of the Co-Op.

[7] At that time Mr. O’Brien sought the appointment of an inspector under s. 148 of the Co-operative Corporations Act, RSO 1990, c. C.35 and to secure an order in the Superior Court of Justice (“SCJ”) that the Co-Op comply with its bylaws.

[8] By letter dated September 20, 2013, FSCO advised that it had determined that there was insufficient evidence of fraud or dishonesty to appoint an inspector. FSCO also noted that the allegations of criminal activity ought to be reported to the police and that privacy issues fell under the jurisdiction of the Office of the Privacy Commissioner.

[9] In 2014, Mr. O’Brien commenced an application in the SCJ for similar relief. The application record exceeded 700 pages in length and contained 164 exhibits. At the initial court appearance, the presiding judge commented negatively on the application’s voluminous materials which prompted Mr. O’Brien to reduce it by about 200 pages and approximately 60 exhibits.

[10] The application was heard in March 2015 by Rutherford J. The hearing took about one day. The application was dismissed and costs of $1,113.18 were ordered against Mr. O’Brien. Justice Rutherford commented that Mr. O’Brien had not provided hard evidence of improper conduct or statutory non-compliance that warranted court intervention. He also observed that Mr. O’Brien presented as a disaffected member of the Co-Op who had assiduously studied the by-laws and policies and seized all available opportunities to point to errors as evidence of a conspiracy to dominate or marginalize out of favour members (see O’Brien v. Blue Heron Co-Operative Homes Inc., 2015 ONSC 2929 at paras. 11, 18).

[11] This decision was appealed to the Court of Appeal. The appeal was dismissed on December 8, 2015 but not before Mr. O’Brien argued two procedural motions (substantially unsuccessful) in the Court of Appeal prior to the appeal hearing. Also, at the appeal hearing, Mr. O’Brien brought a motion to permit fresh evidence which was dismissed. The Court of Appeal imposed a costs order of $1,500.00.

[12] He then brought an action in Small Claims Court. The claim was 44 pages long plus numerous attachments. It included issues previously raised in the FSCO complaint and the application in the SCJ.

[13] The applicants’ brought a motion in Small Claims Court pursuant to Rules 12.03(1) (a) and (c) on the basis that the claim did not disclose a reasonable cause of action, was inflammatory, a waste of time, a nuisance or an abuse of the court’s process and that the claim had no meaningful chance of success.

[14] The two groups of applicants had separate reasons to support their requests. The requests were granted except for an allegation of defamation directed at Ms. Bainbridge and the Co-Op.

[15] Mr. O’Brien brought a motion in response to the applicants’ request that his claim be struck out, alleging that they had not raised a reasonable defence or alternatively, that they should provide particulars and copies of relevant documents. This motion was dismissed.

[16] Mr. O’Brien appealed the decision of the Deputy Small Claims Court Judge to Divisional Court and sought several ancillary orders as well, including a request for the court to provide an interpretation of s. 31(a) of the Courts of Justice Act.

[17] In response, the applicants brought a motion for security for costs which was heard by Smith J. sitting as a single judge of the Divisional Court on October 23, 2017. By this time the costs order made by Rutherford J. (now retired) from 2015 had been substantially paid by way of 19 payments of $55.00 each. The $1,500.00 costs order imposed by the Court of Appeal remained outstanding. In a 14 page decision, Smith J. concluded that security for costs totalling $10,000 for the two groups of applicants was appropriate and he ordered that if the costs were not paid within 60 days, Mr. O’Brien’s appeal would be dismissed. In doing so, he commented that in his view, Mr. O’Brien was motivated by anger and sought revenge for being removed as a director of the Co-Op’s board (see O’Brien v. Blue Heron Co-operative Homes Inc., 2017 ONSC 7168 at para. 31).

[18] Mr. O’Brien’s reaction was to bring a motion to set aside the order of Smith J. and for leave to dispense with appeal books and transcripts and requesting that the reconsideration of the security for costs order be heard at the same time as the appeal of the order from Small Claims Court striking out his pleadings.

[19] Mr. O’Brien brought a parallel proceeding to his appeal of Deputy Judge Dwoskin’s dismissal of most of his Small Claims Court claim. Deputy Judge Dwoskin held that there were special circumstances that warranted a departure from the standard $100.00 costs provision contained in Rule 15.07 of the Small Claims Court Rules, O. Reg. 258/98. The parallel proceeding was a judicial review application to set aside the costs order of $2,000.00 in addition to the appeal of the main part of his decision.

[20] Part of the relief sought in one of the motions Mr. O’Brien brought in the Divisional Court was for the judicial review application to be heard by the same panel hearing his request to set aside the security for costs order of Smith J., and the appeal of the Small Claims Court order. The “consolidation” motion was heard by Doyle J. on April 3, 2018. Justice Doyle made the obvious oberservation that to grant the request would render the security for costs order moot. She made several other orders on consent. There was no order respecting costs.

[21] On September 18, 2018, a panel of the Divisional Court refused to set aside the order of Smith J. and issued a costs order of $5,000.00 against Mr. O’Brien.

[22] This decision resulted in the termination of the Small Claims Court appeal to the SCJ because Smith J. had provided for its termination if the security for costs were not paid within 60 days and the required payment was not made.

[23] Mr. O’Brien then sought leave from the Court of Appeal to appeal the decision of the Divisional Court upholding the security for costs order of Smith J. Leave was not granted and the Court ordered costs of $1,500.00.

[24] As for the judicial review application, Mr. O’Brien abandoned that proceeding about a year after it was commenced.

[25] This prompted the applicants to request costs of $1,000.00 for the abandoned judicial review. Mr. O’Brien declined to pay this sum. The applicants’ proceeded to assess their account which was allowed as presented at about $3,100.00. Mr. O’Brien filed a Notice of Objection which contained an indication the costs should not exceed $1,500.00.

Positions of the Parties

[26] The applicants say that Mr. O’Brien’s conduct warrants a finding that he is a vexatious litigant and that his access to the courts needs to be controlled.

[27] The position of Mr. O’Brien is that he has not acted improperly, that he is entitled to protect his rights and to raise issues of improper conduct that warrant scrutiny. He says that the applicants have brought this motion as a tactical step in an effort to prevent him from pursuing legitimate complaints, to prevent him from showing the co-operative movement in a bad light and in particular, to curtail his contention that he has been defamed.

[28] He points to certain established badges of impropriety that are not present here:

(a) he is not disrespectful or disdainful of the judicial process;

(b) he does not seek adjournments and has not failed to appear when required to do so;

(c) he has not sought to have lawyers removed from cases;

(d) he has not alleged bias on the part of the judiciary or sought to have judges recuse themselves;

(e) he has not sued persons or public officials not connected with the case,

(f) he has not been active on social media about the issues, and

(g) he has not filed complaints about counsel to their regulators.

[29] I would observe that Mr. O’Brien’s conduct at the hearing of this application was polite and respectful and he sought to address the issues to the best of his ability as a lay person.

The Applicable Principles

[30] The law respecting vexatious litigants has been summarized on numerous occasions (see Lang Michener et al. v. Fabian et al., 1987 CanLII 172 (ON SC), 1987, 59 O.R. (2d) 353 at pgs. 8 and 9 and Howie, Sacks and Henry LLP et al. v. Wei Chen, 2015 ONSC 2501 at para. 29).

[31] Vexatious claims are to be differentiated from unmeritorious claims. In broad terms, a vexatious litigant is a person who institutes repeated, frivolous lawsuits, often directed at one person or a group of related persons. The term also describes a person who institutes numerous court proceedings that are a waste of time or a nuisance (see Abrams and McGuiness, Canadian Civil Procedure Law, 1st ed., at para. 3.19).

[32] The list of factors to be taken into account is not closed and not all enumerated factors need to be present to make a finding that a litigant qualifies as “vexatious”.

[33] The whole history of the matters in issue must be examined even where there may have originally been a good cause of action.

[34] A finding that a litigant is vexatious limits that person’s access to the courts and therefore provisions authorizing this remedy ought to be narrowly construed (see Foy v. Foy (No. 2), 1979 CanLII 1631 (ON CA), [1979] O.J. No. 4386 (C.A.)).

The Principles Applied

[35] In this case I find the following factors to be determinative:

(a) Mr. O’Brien has initiated multiple proceedings where the issues overlap;

(b) He pursued proceedings that he knew or ought to have known were unnecessary;

(c) Objectively assessed, Mr. O’Brien has taken actions that are intended to be oppressive and for improper purposes including harassment and to drive up the costs of the opposing parties;

(d) There are outstanding costs orders that have accumulated to the point where there is no reasonable prospect they will ever be paid. This is not to say that Mr. O’Brien has not paid any costs, he has, but the point is that as a recipient of public assistance, he has very limited financial resources and only pays what he wants, when he wants;

(e) Mr. O’Brien persists in pursuing unsuccessful appeals.

(f) He uses his impecuniosity as a tactic because the tempering effect of the risk of an adverse costs order is non-existent in this situation. At the same time, Mr. O’Brien forces the other side to incur significant legal costs to respond to his intricate legal manoeuvering.

(g) Access to the courts is not unlimited. Mr. O’Brien has consumed a disproportionate share of scarce judicial resources.

(h) He initiated duplicative and unnecessary proceedings (i.e. judicial review application to quash Deputy Judge Dwoskin’s costs order) when he had already decided to appeal the decision.

[36] The applicants argue that Mr. O’Brien ought to be required to pay all outstanding costs orders as a condition of being permitted to apply for leave. I do not agree. Such a condition could pose an undue restriction on his ability to seek redress for a legitimate grievance.

Disposition

[37] The following order shall issue:

(a) Stephen O’Brien shall not initiate or continue any action, application or other originating process, motion or appeal in any court governed by the Courts of Justice Act without first obtaining leave of a judge of the Superior Court of Justice;

(b) the Small Claims Court proceeding bearing court file no. 16-SC-141804 is stayed and shall remain so until leave is granted for it to be continued;

(c) should Stephen O’Brien seek to commence or continue any proceeding without first filing an entered order permitting him to do so, that proceeding shall be stayed upon any person filing a copy of this order;

(d) any request for leave to initiate or continue a proceeding affected by this order shall be made in writing, without notice to any other party and shall include a copy of the claim, application or other pleading sought to be delivered or filed. The leave application, not including the draft document for which leave has been requested, shall not exceed 10 pages;

(e) this order does not apply to an appeal of this order; and

(f) Mr. O’Brien’s counter application is dismissed.

[38] On the issue of costs, I have a costs outline from the applicants. Any further submissions from the applicants shall be delivered within 10 days. Mr. O’Brien shall have until July 13, 2019 to respond.

Mr. Justice Martin S. James

Date: June 20, 2019

COURT FILE NO.: 19-79550 DATE: 2019/06/20

ONTARIO SUPERIOR COURT OF JUSTICE

RE: Blue Heron Co-Operative Home Inc., Michelle Bainbridge, Co-Operative Housing Federation of Canada and Co-Operative housing Association of Eastern Ontario – Applicants/Respondents by Counter Application)

AND

Stephen O’Brien – Respondent/Applicant by Counter Application

BEFORE: Mr. Justice Martin S. James

COUNSEL: Joseph Jebreen, for the Applicants Blue Heron Co-Operative Homes Inc. and Michelle Bainbridge Neil Milton, for the Applicants Co-Operative Housing Federation of Canada and Co-Operative Housing Association of Eastern Ontario Stephen O’Brien, Self-Represented

ENDORSEMENT

Released: June 20, 2019