Court File and Parties
COURT FILE NO.: CV-18-597479 MOTION HEARD: 20181101 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Anthea Koon, Applicant AND: Lawyers Professional Indemnity Company, Respondent
BEFORE: Master P.T. Sugunasiri
COUNSEL: Lung, L., Counsel for the Respondent/Moving Party Koon, A., the Applicant/Responding Party in person
HEARD: November 1, 2018
REASONS FOR DECISION
[1] This motion arises out of a motion filed by Ms. Koon to set aside various orders of Justice Matheson pursuant to Rule 59.06 and a personal costs award against two lawyers acting on behalf of LawPRO. LPIC seeks to strike certain paragraphs of Ms. Koon’s Notice of Motion because they are scandalous, frivolous, vexatious and/or an abuse of process. For the reasons that follows, I allow the motion in part with substantial indemnity costs.
[2] In early 2009, while Ms. Koon was acting for a client in an estate litigation matter, she was given notice that costs would be sought against her personally. Koon reported the costs claim to LawPRO. LawPRO evaluated the claim and ultimately concluded that it should be settled. LawPRO exercised its rights under the indemnity policy to settle the claim without Koon’s consent.
[3] As Koon disputed settlement of the claim, she invoked her right under the LawPRO policy to have the dispute determined by an arbitrator. The matter was arbitrated by the Honourable Dennis Lane who concluded that LawPRO had acted reasonably and in good faith in settling the claim against Koon (“Arbitral Award”).
[4] In April of 2011, Koon brought an application for judicial review of the Arbitral Award. On September 26, 2016, Justice Matheson dismissed the application with costs payable to LawPRO in the amount of $10,000 (“JR Judgment”).
[5] Following the release of the JR Judgment, Koon brought a motion under Rule 59.06 for orders setting aside the Arbitral Award and the JR Judgment. The motion was heard and dismissed by Justice Matheson on November 22, 2016 (“First 59.06 Order). In that motion, Koon made allegations of impropriety against LawPRO’s counsel with no finding of impropriety made by Justice Matheson.
[6] On August 10, 2018, Koon served a second Rule 59.06 motion to set aside the JR Judgment and the First 59.06 Order (“Second 59.06 Order). In the first emanation of this motion, Koon alleges that counsel for LawPRO acted improperly and made misrepresentations to judges in the course of having the orders and judgments signed. Most importantly, she alleged that Madhany for LawPRO settled the orders and judgment in the various proceedings “using the same method as the Applicant” did in the estates matter, yet failed to file a claim with LawPRO as she had. The conduct complained of and alleged to be the same as hers was simply that Madhany sought a case conference to settle the terms of the JR Judgment and First 59.06 Order because he could not secure Koon’s approval after a year of trying. Ultimately Matheson, J. denied the case conference request and simply signed the draft orders.
[7] After the initial Notice of Motion was delivered, Mr. Lung assumed carriage of the file on behalf of LawPRO. Ms. Koon was advised of this change on August 16, 2018.
[8] On August 23, 2018, Koon served a fresh Notice of Motion now seeking costs personally against both Madhany and Lung. She also added new allegation of fraud and unprofessional conduct against Madhany in relation to the collection of an unpaid insurance deductible and accumulated claims history surcharges that Koon owed to LawPRO as a result of the arbitration. These enforcement measures were not taken until June of 2018, over 18 months after the Court dismissed the First 59.06 motion. The new Notice of Motion also adds a number of assertions against Lung for unprofessional conduct even though he only became involved in the file two weeks before the new Notice of Motion was served.
Law and Analysis
[9] Rule 25.11 allows the Court to strike out all or any part of a pleading or other document on the basis that it is scandalous, frivolous, vexatious or an abuse of the process of the court. “Document” includes a notice of motion. [1] Justice Epstein goes on to explain what constitutes a scandalous, frivolous or vexatious document and what amounts to an abuse of process. Included in the list are portions of documents that are irrelevant or contain unfounded inflammatory attacks on the integrity of a party. [2] Abuse of process is designed to protect the public interest in the integrity and fairness of the judicial system. It does so by preventing the improper use of it including to harass or oppress other parties or counsel. Proceedings brought for nefarious purposes other than to assert a litigant’s legitimate rights is an abuse of process. [3]
[10] My task in this case is not to determine whether Koon’s second 59.06 motion as a whole is frivolous, vexatious or an abuse of process. In fact in the normal course, one would dissuade parties from bringing motions to strike notices of motion and simply make the arguments during the motion itself. However, in rare instances such as this when fraud and unprofessional conduct is alleged by the moving party against counsel, a motion to strike those allegations is understandable.
[11] In order to assess whether or not the impugned paragraphs of the Notice of Motion should be struck, it is important to understand what the motion is about. At its core, Koon is seeking to “amend, set aside, or vary” the multiple endorsements and decisions made by Justice Matheson. At paragraph 13 of the Notice of Motion, Koon states “That the learned Application and Motion Judge erred in finding that the Applicant was treated fairly, was afforded an opportunity to present her case or the respond to the Respondent’s case and that the Applicant was accorded procedural fairness and natural justice.”
[12] Rule 59.06 allows an order to be set aside or varied or suspended in certain circumstances. Such an order can be made, for example if there has been fraud in the way a judgment or order was obtained, not procedurally, but in relation to the foundation of the decision. [4] In general, a Notice of Motion should only contain allegations relevant to the test to be for the relief sought.
Paragraph (m) of the August 23, 2018 Notice of Motion
[13] In this paragraph, Koon claims:
(m) her costs of this Application and motion against the lawyer of the Respondent and Jameel Madhany.
[14] In paragraph (g) of the Notice of Motion, Koon seeks to vary the JR Judgment. That proceeding is done and costs were awarded against Koon. alleges, however, that Madhany made misrepresentations to Justice Matheson (para. 14) in those proceedings. Rule 57.07 permits the Court to order a lawyer personally to pay the costs of any party when the lawyer’s conduct has caused costs to be incurred or wasted. Giving this Notice of Motion the most liberal interpretation, the relief claimed is within the realm of possible remedies Koon could obtain if she proves her motion. If she obtains a finding that Madhany made material misrepresentations during the judicial review hearing, a court may consider personal costs against him. Since it is not for me to decide the merits of the motion, I do not strike this portion of (m).
[15] However, I do strike any relief sought in (m) against Mr. Lung for the Application and against Madhany and Lung for this motion. Mr. Lung was not involved with the judicial review. Further, there can be no basis for such costs BEFORE the motion is even heard since the egregious conduct is yet to be seen. As such, it is frivolous and improper for this request to be in the Notice of Motion. Paragraph (m) is amended to read:
(m) her costs of this Application and motion against the lawyer of the Respondent and Jameel Madhany.
Paragraph 14-24 of the August 23, 2018 Notice of Motion
[16] LawPRO complains that these allegations are irrelevant and highly prejudicial to LawPRO and its counsel. The paragraphs read as follows:
The lawyer of the Respondent and Jameel Madhany, misrepresented to the Respondent on the fact of this matter, in an effort to cover up their/his own errors and omissions;
The Respondent alleged and referred the Applicant for licence suspension, in contravention of the Rules of Professional Conduct;
The Respondent took advantage of the Applicant’s emotional illness, consistently threatening her with license suspension, thereby reducing her ability to work on this matter;
The Respondent handled the Applicant’s claim negligently, relying on false and misleading representations from the Respondent’s external counsels, and refused to correct their own errors, causing the need to bring this motion;
The Respondent allows the external counsels to deal with the Applicant in a high handed manner, causing the Applicant’s emotional illness, and having a reduced ability to work on this motion and this matter;
The Respondent allowed external counsels to breach Rules of Civil Procedure and The Rules of Professional Conduct in their procedure used to get the results that the Respondent desires to get;
The lawyer of the Respondent and Jameel Madhany counselled the Respondent to refer the Applicant for license suspension, despite the decision of Justice W. Matheson of May 18, 2016;
The lawyer of the Respondent and Jameel Madhany and Lucas E. Lung, provided false information on this file to the Respondent, and used false information as a basis for licence suspension, in an effort to stop the Applicant from bringing this motion to claim costs against him;
The lawyers of the Respondent and Lucas E. Lung and Jameel Madhany, despite their conflict of interest, made decisions on the Applicant’s licence, and are in breach of the Rules of Professional Conduct;
Lucas E. Lung, being the lawyer of the Respondent, is also representing Jameel Madhany in this motion on cost claim against him, and is in breach of the Rules of Professional Conduct;
The lawyer of the Respondent, Jameel Madhany, failed to file a Claim with LawPro, and is in conflict of interest with his client;
[17] I strike paragraphs 15, 17 and 20-24 of the August 23rd Notice of Motion. These allegations have to do with licence suspension issues that occurred after the Matheson decisions in question were made and are irrelevant to whether those orders should be varied or suspended. They are highly prejudicial to the reputations of LawPro counsel and add no value to Koon’s motion other than to colour it.
[18] Paragraphs 14, and 16-19 relate to the approach taken by the Respondent on the Application. However tenuous, they have enough relevance to Koon’s overall position that she was deprived of natural justice and procedural fairness that they should remain available to the motions judge. Whether this will persuade a judge to vary, amend, or suspend any of Justice Matheson’s judgment is not the question. Again, I leave it to the motions judge to determine the veracity of her arguments. However steep Koon’s hill may be, I do not find paragraphs 14 and 16-19 to be scandalous, frivolous, vexatious or an abuse of process such that they should be struck from the Notice of Motion.
Disposition
[19] For the above-noted reasons, I order as follows:
a. Paragraph (m) of the August 23, 2018 Notice of Motion brought in CV-18-597479 is struck in part and amended to read: her costs of this Application and motion against the lawyer of the Respondent and Jameel Madhany.;
b. Paragraphs 15, 17 and 20-24 inclusive are struck from the August 23, 2018 Notice of Motion brought in CV-18-597479 without leave to amend; and
c. Ms. Koon shall serve and file a Fresh As Amended Notice of Motion reflecting my order within 2 days of obtaining a hearing date for her motion.
Costs
[20] Mr. Lung provided me with a costs outline and claims substantial indemnity costs of $6,198.34. As noted by Justice Lax in Re: Manning, “costs on the higher scale can be awarded as a form of chastisement and as a mark of the court’s disapproval of a litigant’s conduct. This is intended to punish as well as deter others from engaging in similar conduct…. Without discouraging the tenacious pursuit and advancement of serious claims of impropriety in a proper case.” (paras. 7-9)
[21] In many cases, the court discourages these types of interlocutory motions on the theory that any problems with the notice of motion can be addressed at the hearing. In those instances, costs are often not awarded to the moving party to dissuade interlocutory motions within interlocutory motions. On the one hand, I can understand LawPRO and its counsel were anxious to have parts of the Notice of Motion struck. Koon should not have made bald allegations of fraud against colleagues at the bar on matters irrelevant to the Rule 59.06 motion. “A reputation once broken may possibly be repaired, but the world will always keep their eyes on the spot where the crack was.” [5] On the other hand, the chance of anyone seeing the notice of motion is slim since it resides in the court file on a case with no media attention. LawPRO could have waited until the return of the motion to raise its concerns. The benefit of the motion is that it narrows the issues to be ultimately determined by the motions judge. In that sense, this motion has added value to the efficiency of the overall case. One also hopes that the motion will deter parties from making irrelevant and prejudicial allegations against officers of the Court. For these reason, the factors in Rule 57.01 and the record before me, I indemnify LawPRO for its efforts and order Koon to pay costs of $4500 payable within 60 days of today’s date.
Original signed Master P. Tamara Sugunasiri Date: January 17, 2019